All

Apache is functioning normally

Airline credit cards typically offer standard benefits, like bonus miles on airfare purchases, free checked bags and priority boarding. But one of the most valuable perks any airline credit card can offer is a companion ticket that can cut your cost of travel in half.

Thanks to its high welcome bonuses, earning structure and airfare discounts, the British Airways Visa Signature Card has long been considered one of the best credit cards from a foreign airline offered in the U.S., especially when you consider British Airways’ extensive U.S. route network. But it also comes with one of the most interesting companion travel benefits: the Travel Together Ticket.

The rules around redeeming this perk have recently been improved, and it is now easier to use and more valuable than ever.

Here are the details on this companion deal and how to maximize it.

How to earn the British Airways Travel Together Ticket

THE POINTS GUY

U.S.-based British Airways Visa Signature Card cardholders who spend $30,000 on their card in a calendar year can earn a Travel Together Ticket (posted within 4-6 weeks). The voucher is valid for outbound travel up to 24 months from the issue date (the return flight can be after that).

The British Airways Visa Signature Card offers 75,000 Avios after spending $5,000 in the first three months and exclusive offers when flying the carrier, such as a 10% discount on British Airways flights originating in the U.S., up to $600 in statement credits for award flight taxes and fees every year and earns 3 Avios per $1 spent with British Airways, Aer Lingus, Iberia and Level. The annual fee is $95.

Only the main cardholder with a registered address in the U.S. is eligible to earn the Travel Together Ticket; additional cardholers are not. Only one voucher can be earned each calendar year, even if the cardholder spends more than $30,000 on the card.

Rules for redeeming The Travel Together Ticket

The Travel Together Ticket comes with several conditions worth considering when it comes time to redeem it, some of which are positive and some negative.

Previously, these vouchers could only be applied to award bookings using British Airways Avios and on British Airways-operated flights. However, this rule has recently been relaxed, so they can now be redeemed on flights operated by Aer Lingus and Iberia, though note you must still book your flight(s) through British Airways Executive Club.

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts.

The Travel Together Ticket differs from other companion tickets, which are more like a two-for-one paid deal. In this case, you’re getting a two-for-one award redemption but are still responsible for the taxes and other carrier-imposed charges on your ticket (which can be substantial). This also means you’ve got to find two awards open on the same itinerary in the same cabin. If you wish to travel in first class, two award seats on the same flight can be tough to come by.

For solo travel, you can redeem it for 50% of the Avios required for one passenger, which is a handy perk if you would rather travel alone and save Avios.

Previously, the voucher could only be used on round-trip itineraries originating in the United States. However, this rule has also recently been relaxed, so voucher holders can now commence their itinerary anywhere in the world that British Airways, Iberia or Aer Lingus operates from (provided there is Avios availability).

Your companion must be booked in the same cabin on your itinerary (unless you redeem it for solo travel). So if you book a business-class award for yourself, you must find a second one for your companion on the same itinerary. Stopovers are allowed.

Though the terms are not explicit, you should plan to have your card open and in good standing at the time your want to use your Travel Together Ticket.

Related: How to avoid fuel surcharges on award travel

When it makes sense to redeem the Travel Together Ticket

BECKY BLAINE/THE POINTS GUY

Now we come to the real question: Is it worth using the Travel Together Ticket? The answer depends on how you plan to redeem it.

British Airways awards are notorious for high taxes and surcharges on flights through London. While this generally makes economy awards a bad value, it can still be worth paying less than $2,000 per person to fly in business or first class as part of an award ticket compared to shelling out the cash fare, which will be many thousands of dollars, especially with premium fares across the Atlantic as high as they currently are.

BA introduced a new option in 2022 called Reward Flight Saver to use more Avios to reduce the cost of the taxes and surcharges on Avios redemptions.

British Airways award availability between the U.S. and Europe tends to be much better than what U.S. and other European carriers make available. So if you want to book an award, your chances of finding it are good.

The other key benefit is that British Airways has retained an award chart, so you can be confident of how many Avios you will need on any day — no 400,000 points per flight pricing with this program.

Related: Dynamic pricing vs. fuel surcharges — which is the lesser of two evils for your next redemption?

Now, let’s take four scenarios and compare the cost of using the Travel Together Ticket compared to purchasing airfare to determine whether this is a good deal.

To make things simpler, we’ll look at a single route from Atlanta (ATL) to London Heathrow (LHR) over a single set of dates in November since award availability was open across all four cabins offered by BA on these flights (these are off-peak dates). The taxes and fees are typical examples of what you would expect to pay, both for two people traveling together and solo travelers, given the ticket can also be redeemed for solo travel.

First up, economy. A round-trip award on this itinerary for two people using the lowest surcharge Reward Flight Saver option would cost 120,000 Avios plus 300 British pounds ($393) in taxes/fees.

BRITISHAIRWAYS.COM

If you were using this as a Travel Together Ticket, you’d still be paying 60,000 Avios plus $393 for two tickets. This is because you would only be charged the Avios for one passenger but the fees, taxes and surcharges for both. Compare that to the regular economy fare on the same dates of around $1,000 per person for non-stop flights and this would be a great way to use Avios to save hundreds of dollars.

If you are a solo traveler, you can redeem the Travel Together Ticket for 30,000 Avios plus $196 in fees, taxes and surcharges, saving over $800 on the cash fares for the same flight.

Related: A review of British Airways’ A350 in economy from London to Dubai

Now for premium economy. Here’s a sample award from the same week that would cost 190,000 Avios plus 660 British pounds ($864) for two passengers.

BRITISHAIRWAYS.COM

A paid fare on the same dates would be $1,813 per person, so $3,626 for two passengers. With a Travel Together Ticket for two passengers, you would be charged 95,000 Avios plus $864, saving you thousands off the cash ticket.

Solo travelers could redeem 45,000 Avios plus pay $432 in taxes and surcharges, another excellent way to save big on the $1,813 cash fare.

Related: Is British Airways premium economy worth it on the Boeing 777-300ER?

In business class, British Airways will charge 360,000 Avios plus 900 British pounds ($1,179) in taxes and surcharges for two passengers at the Reward Flight Saver rate.

BRITISHAIRWAYS.COM

With the 50% reduction in Avios with the Travel Together Ticker, you would still be charged a huge 180,000 Avios plus the full $1,179 co-payment. However, with cash fares on these dates close to $4,000 each roundtrip in business class, you would still save thousands of dollars using the voucher.

For solo travelers, just 90,000 Avios plus under $600 in taxes and fees saves versus $4,000 for a cash ticket is a great deal.

Related: British Airways’ Club Suites don’t disappoint: On board a retrofitted 777 from London to New York

Reward Flight Savers are not offered in first class, so while you’ll only need marginally more Avios than the business class rates above, you must pay the full fees, taxes and surcharges. For two passengers using a Travel Together Ticket this would be 170,000 Avios roundtrip plus an eye-watering 3,263 British pounds ($4,279).

BRITISHAIRWAYS.COM

While this would represent a decent saving on the cash fares of almost $6,000 per person, given the thousands of dollars of surcharges you must pay for a first class redemption, using the voucher for business class instead would be a much better deal.

How to earn Avios

ZACH GRIFF/THE POINTS GUY

If you want to use a Travel Together Ticket but don’t have enough British Airways Avios in your Executive Club account, British Airways is a transfer partner of Capital One, Chase Ultimate Rewards, American Express Membership Rewards, Bilt Rewards and Marriott Bonvoy, making Avios one of the easiest currencies to earn.

Points transfer from Chase, Bilt and Amex at a 1:1 ratio (in addition to occasional transfer bonuses of up to 40%), while Marriott points transfer to Avios at a 3:1 ratio. Plus, you’ll get a 5,000-Avios bonus for every 60,000 Marriott points transferred.

The following cards all currently offer strong welcome bonuses that you could easily convert to Avios:

  • American Express® Gold Card: Earn 60,000 Membership Rewards points after you spend $4,000 on purchases in the first six months of account opening. Terms apply.
  • The Platinum Card® from American Express: Earn 80,000 Membership Rewards points after you spend $6,000 on purchases within the first six months of card membership. Check to see if you’re targeted for a 125,000-point welcome offer through CardMatch (offer subject to change at any time). Terms apply.
  • Capital One Venture Rewards Credit Card: (see rates and fees) Earn 75,000 bonus miles once you spend $4,000 on purchases within the first three months from account opening.
  • Capital One Venture X Rewards Credit Card: (see rates and fees) Earn 75,000 bonus miles once you spend $4,000 on purchases within the first three months from account opening.
  • Chase Sapphire Preferred Card: Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.
  • Chase Sapphire Reserve: Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.
  • Ink Business Preferred Credit Card: Earn 100,000 bonus points after you spend $8,000 on purchases in the first three months from account opening.

Bottom line

The British Airways Visa Signature Card’s Travel Together Ticket can save you thousands of dollars on British Airways, Iberia or Aer Lingus flights from anywhere in the world by allowing two passengers to travel together, in any cabin with award availability and only pay the Avios required for one passenger. The spending requirement to earn the perk is high, though.

Following last years Reward Flight Saver rollout to allow passengers to reduce the notorious BA carrier-imposed surcharges by paying more Avios, this voucher is a valuable credit card perk for economy, premium economy and business class flights. However, the savings are less in first class as the Reward Flight Saver option is not available.

Source: thepointsguy.com

Apache is functioning normally

The stock market took a hit yesterday with the Dow setting a record for most points dropped in a single day. With the flight to safety from investors, the bond market rallied, pushing the yield lower on the 10-year Treasury note.

Mortgage rates, which are closely tied to the 10-year yield, similarly moved lower. Read on for more details.

Where are mortgage rates going?                      

Treasury yields move back up today

Unless you live under the proverbial rock, you know that the stock market got slammed yesterday, with the Dow falling by more points (1,175) than any day in its existence.

Click here to get today’s latest mortgage rates (Jul. 22, 2023).

Naturally, there has been a lot of commentary on the matter (with the two leading theories being increasing inflation and a faster tightening schedule from the Fed) but the reality of the situation is that nobody really knows exactly why it happened.

Short term corrections aren’t anything out of the ordinary, so while they do create quite a fuss on Wall Street, there’s no need to go into a full panic. The fact that no one truly knows everything about what’s happening is made clear when you look at all of the various predictions for what will happen next.

There are basically two camps out there: those that think the decline will continue, and those who don’t. Right now, it’s kind of a mix, with bond yields rising and mixed results in the stock market.

The yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, is up a little over four basis points since the start of the day, putting it at 2.75%. That’s still down from yesterday’s peak of 2.88%.

Mortgage rates typically move in the same direction as the 10-year yield and similarly moved lower yesterday only to retreat back up slightly today.

Where we go from here is really anyone’s guess. There’s not a lot of economic data out the rest of the week to sway investors in one direction or the other.

Rate/Float Recommendation            

Lock now while rates are down on the week

Mortgage rates are down on the week, which is great news for borrowers. If you’re thinking of purchasing or refinancing, now is the perfect time to lock in a rate. The long-term projection is for mortgage rates to rise so taking action sooner rather than later is likely to get you the better deal.

Click here to head to our Mortgage Builder and figure out how much you could save.     

Today’s economic data:                                

International Trade  

The nation’s trade deficit widened to $53.1 billion in December. That’s more than the $51.9 billion that analysts had predicted.

Fedspeak  

  • St. Louis Fed President James Bullard at 8:50am

JOLTS  

The Labor Department’s latest data is showing 5.811 million job openings in December.

Get the GreenLight and close in 21 days*      

Notable events this week:               

Monday: 

  • PMI Services Index
  • ISM Non-Mfg Index

Tuesday:    

  • International Trade
  • Fedspeak
  • JOLTS

Wednesday:      

  • Fedspeak
  • EIA Petroleum Status Report
  • 10-Yr Note Auction

Thursday:        

  • Fedspeak
  • Jobless Claims

Friday:       

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Apache is functioning normally

The American dream of homeownership is getting further out of reach for many Hoosiers. 

As pandemic-era supply shortages began to return to normal, home prices fell, giving prospective homebuyers hope they could find something affordable. But those hopes were dashed for some who found they could not pay the high mortgage rates, which are currently more than double pandemic lows. 

According to Paul Schwinghammer, former president of the Indiana Builders Association, markets will bounce back eventually. But when prices return to “normal,” many will still be unable to afford the investment that sustained previous generations. 

“The days of a brand new home at $200,000 are probably very much in our rearview mirror,” Schwinghammer said. 

As potential homeowners are pushed into becoming renters due to high mortgage rates, Schwinghammer said the thriving rental market is not the silver bullet to the housing market some think it is. 

“That’s not the American dream,” he said. 

Homeownership is increasingly expensive

Housing has become more expensive overall in the past several decades. 

In 1950, Hoosiers made less — the median household income was $2,827, or about $30,000 in today’s dollars — now the median household income is $61,944. But housing prices have zoomed past that growth. 

In 1950, the inflation-adjusted cost of the median home value was around $70,000. Today, the median listing price is $218,000, according to the state housing dashboard. In other words, the cost of housing has tripled, clearly outpacing wage growth in Indiana. 

Paul Schwinghammer, former president of the Indiana Builders Association (Courtesy photo)

The cause of this gap is hotly debated. Some argue it is due to a decreased supply of housing — in Indiana, 16.8% of existing housing was built prior to 1940, and the percentage of homes built in the 2010s makes up the smallest slice of the housing pie at just 5.3%. 

Experts point to the 2008 housing crash as a major factor in the building slowdown. After the crash, the membership of the Indiana Builders Association fell from 7,200 to 3,000, and the industry has been cautious ever since. 

While building picked up pace in response to pandemic-driven demand, Indiana still has a 1.04% shortage of housing stock according to FreddieMac — the largest of all surrounding states. 

Density, zoning and community opposition

At the most basic level, a housing unit cannot be cheaper than the raw cost to build it. During the pandemic, supply and demand saw timber, copper and other building materials spike in price, which was exacerbated by high labor costs. Schwinghammer argues this raw cost can be further increased by municipal regulations surrounding lot size, materials and aesthetics. 

“That’s all well and good, except you’re ruling out homebuyers,” Schwinghammer said. 

For affordability advocates, a relatively simple solution is increasing the amount of homes that can be built in an area by reducing lot size. This allows more homes to be built, increasing supply, all at a lower cost to builders, which are hopefully passed onto consumers. 

But in practice, housing density is fiercely contested. Examples of density can range from apartment complexes to duplexes, which can be impossible if an area is zoned for single-family use. Other times, things like parking space requirements can thwart density attempts. 

Need to get in touch?

Have a news tip?

But overwhelmingly, the biggest opposition to denser housing can come from neighbors and community members, whether it’s an apartment complex in Broad Ripple or a controversial zoning change to allow for multifamily housing in certain Bloomington neighborhoods. In fact, a survey of New York developers found that the majority of opposition to developments came from residents. 

Ultimately, Indiana joins most of the country in having high rates of single-family detached housing, with the housing type making up 73.1% of all housing in Indiana, according to the state housing dashboard. 

A shortage of affordable housing

While housing supply remains low in general, low-income Hoosiers are facing an even bigger gap when it comes to affordable housing supply. According to a Prosperity Indiana report, the state is 120,796 homes short of affordable and available rental homes, which means there are only 39 affordable units available for every 100 low-income renter households. The numbers show Indiana is performing worse than the regional average. 

“Indiana is increasingly out of step with its Midwest peers when it comes to affordability and stability,” Andrew Bradley, policy director at Prosperity Indiana, said. 

While commodity prices have dropped, mortgage rates have skyrocketed. (Photo by Spencer Platt/Getty Images)

One method of helping low-income renters is Section 8 housing, a federal program that allows income-qualifying individuals to pay subsidized rents. But the program often fails to meet the demand — in Indiana, people are often on waitlists for three to five years before they can get housing, and sometimes the waitlists themselves are closed. There are currently seven waitlists open on the Indiana Housing and Community Development Authority website, spanning only about a third of counties. 

With state and federal assistance so hard to find, some municipalities have attempted to fill the gap in affordable housing through local regulations.

In Bloomington, where housing is the most expensive in the state, local officials attempted to implement inclusionary zoning in 2017. Inclusionary zoning is a type of policy that requires developers to include a certain percentage of affordable units in their projects instead of trying to individually negotiate more affordable units through incentives. 

Andrew Bradley, of Prosperity Indiana (Courtesy photo)

That same year, the Indiana General Assembly banned municipalities from doing so, putting a direct halt to the city’s plans. Today, Indiana preempts municipalities from enacting four different types of equitable housing policies. In addition to inclusionary zoning, these include short term rentals, source of income nondiscrimination policies and rent regulation. Indiana is the only state in the country to prohibit all four policies. 

Bradley said Indiana’s Housing Task Force is focusing too much on building new homes instead of sharing a focus on strengthening protections for tenants and improving current housing stock. He said this is partly due to a lack of representation of everyday Hoosiers on the task force. 

He referenced Senate Bill 202, bipartisan legislation focused on tenant protections that was later stripped down to a study bill, as an example of the priorities of the legislature. The bill did not end up passing the House, and was not selected as a summer study topic.

“Suppliers of new housing have dominated the conversation at the Statehouse,” Bradley said. 

Homebuyers suffer from high rates

Although commodity prices have decreased 10% across the board, Schwinghammer said, homebuyers are not seeing true relief due to high mortgage rates, which currently hover around 7%. Although mortgage rates have spiked as high as 16% in previous decades, the current rate is higher than pre-pandemic rates of around 4% and pandemic lows of 3%. 

Part of this is due to the Federal Reserve’s sharp hikes in interest rates in order to combat inflation. 

Ultimately, Schwinghammer said it would take 33% of the average person’s wage to begin homeownership — resulting in the highest debt to income ratio since 2007. Housing is effectively the least affordable it’s been in nearly two decades, he said. 

As potential homebuyers are shut out of the market, builders have turned to the build-for-rent phenomenon sweeping the country in order to keep busy. BFR involves communities of single family rental homes that people can live in without making a purchase, allowing people to avoid interest rates. 

Schwinghammer said BFR, which once took up 3% of the market, is now 15%. 

As people struggle to afford new homes, pre-existing — and often cheaper — homes are selling less because homeowners don’t want to trade in their lower rates for the current 7% interest rate. 

But the market is cyclical by nature, Schwinghammer said, and interest rates will likely be declining in a year. 

“The natural ebbs and flows of the market will allow that to happen,” he said. 

GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX

SUBSCRIBE

Source: indianacapitalchronicle.com

Apache is functioning normally

While browsing the web the other day, an ad popped up on the screen for a company called EquityKey.

Normally I’m not too moved by banner ads, but this particular ad aligned nicely with the type of stuff I talk about on my blog.

In a nutshell, EquityKey allows homeowners to tap into the equity in their property without taking on a monthly payment.

It’s kind of like a reverse mortgage (for senior citizens), but works quite a bit differently because it’s tied to future home price appreciation.

How EquityKey Works

I dug into the details on their website to see how the program actually works.

As noted, in exchange for a share of your home price appreciation, the company will provide you with an upfront lump sum payment.

This upfront payment is not a loan, meaning no interest is collected and no monthly payments are due, but it does need to be paid back when you sell.

Additionally, you will part with anywhere from 30% to 75% of future appreciation, so it can obviously cost you quite a bit to cash in today.

You can receive up to 17.25% of your property’s current value, so for a home valued at $500,000, the max you could receive would be $86,250.

With a typical home equity line of credit or second mortgage, you’d have to make a monthly payment on the loan balance each month. However, when it came time to sell your home, you’d keep all the equity less the outstanding loan(s).

How Your Property Is Valued

With EquityKey, you avoid the monthly payments but part with appreciation, which is measured using the S&P/Case-Shiller Home Price Index.

When you make an agreement to share your equity, EquityKey will take the designated index for your property location and use that value as the Beginning Index Value for the transaction.

Your home will also be appraised at the time of taking out the equity, and these two figures will determine how much appreciation EquityKey receives when you sell.

The example posted on their website features a San Diego property appraised at $750,000 with a Beginning Index Value of 113 in the year 2000, per S&P/Case-Shiller data.

When the hypothetical property was sold in 2012, the Ending Index Value was 160, representing a 42% increase.

EquityKey would receive whatever percentage of appreciation you allocated when you made the original agreement with them.

This is regardless of what you actually sell your house for. So you are basically incentivized to take care of your property so it fetches a good sales price, and doesn’t underperform the index.

Additionally, you are entitled to the equity beyond the index value of your home. In other words, if that hypothetical home in San Diego sold for $850,000 because of a hot real estate market and pristine upkeep and/or improvements, that $100,000 belongs to you.

However, if that same home were to sell for just $700,000, you’d still be on the hook for the $750,000 valuation. Clearly this could make selling a bit more difficult.

There’s also a pretty important caveat. If you sell, transfer, or change ownership in the first six years after your agreement with EquityKey, the so-called “Minimum Settlement Amount” will apply.

It’s a little unclear what this amount is, but I believe it’s the amount they originally paid you, plus a fee to cover origination and investment return if appreciation isn’t large enough to cover those costs.

My Thoughts

At the end of the day, this sounds like a fairly expensive way to tap into your equity. Sure, you don’t have to make payments each month, but you also part with a good deal of your home price gains, which is one of the major benefits of owning a home.

In the illustration above, you’d get $68,999, but you’d have to pay that back and part with $144,073 in home price appreciation, which is 50% of the projected gain over 10 years.

So it might make better sense to just go with a HELOC or a standard cash-out refinance if you can handle the increase in monthly payments. The interest expense would likely be much lower than the appreciation given up.

This product could make sense for someone unable to pull equity via the traditional methods, or perhaps for someone lacking income to make monthly payments, assuming they really needed the money.

And I suppose a homeowner could “win” if their home value went down because EquityKey won’t take a cut if that’s the case, nor require repayment if the home value drops by more than the payout you originally received.

But the chances of that are probably slim, and you’d have to question why you would stay in a home if the value were destined to drop big time.

EquityKey Program Details

[checklist]

  • You can receive up to 17.25% of property’s current appraised value
  • You part with 30-75% of future appreciation
  • Primary residences and second homes are eligible
  • Max LTV/CLTV at time of application is 80%
  • No underwriting or origination costs, but third-party costs still applicable
  • Takes roughly 4-6 weeks to fund
  • You can refinance, but typically not above 60% LTV
  • Might pay a fee if you sell in less than six years

[/checklist]

Source: thetruthaboutmortgage.com

Apache is functioning normally

You may remember GMAC Bank, which was taken down by its fateful mortgage arm Residential Capital (ResCap) before eventually requiring a government bailout.

It wasn’t an uncommon story at the time; many other mega mortgage companies took a fall too, including the likes of Countrywide and IndyMac, to name but two.

Anyway, ResCap was a big mortgage player back in the day, originating billions of residential home loans in the lead up to the housing bubble. Then it all came crashing down…

Once the company recovered from the financial crisis, it rebranded itself as Ally Financial, offering auto loans and high-yield savings accounts. Those businesses seemed like a safe way to dip their toes back in the lending waters.

The auto loan portion of the business actually runs deep in its history seeing that GMAC stood for General Motors Acceptance Corporation. So you knew they were going to get back into that business, but the mortgage business was still a big question mark.

They’re Back…with a Brand New Name

  • After the Great Recession it became common to rebrand if you made it through
  • Seeing that many companies faced lawsuits and bad PR
  • That explains why ResCap is now known as Ally Home
  • It gives them a fresh start and lets them forget all those painful memories

Somehow these large companies have a way of reinventing themselves, with fresh new names and logos that can make us all forget the ugly past very quickly.

And so without further ado, say hello to “Ally Home,” which is the company’s new direct-to-consumer mortgage offering.

It’s yet another home loan option available to borrowers in the post-crisis mortgage world.

In line with the name change, they seem to want to be your buddy in the financial world, hence the word ally. And they deploy a so-called “Home Team” to help you get your mortgage.

What Does Ally Home Offer?

  • They other both home purchase and refinance loans
  • Including the ability to get cash out if you need it
  • Ally accepts conforming and jumbo loan amounts
  • And has a variety of home loan products including fixed mortgages and ARMs

Like other mortgage lenders, Ally offers both purchase and refinance mortgages, including rate and term and cash-out refis.

So whether you’re buying a home or simply looking to improve your existing interest rate/tap equity, they’ve got you covered.

Additionally, Ally Home offers both conventional and jumbo mortgages, the latter of which are above the conforming loan limit of $417,000 (soon to be $424,100). And now $453,100!

In terms of mortgage choice, you’re able to get a 30-year or 15-year fixed, along with less common varieties such as the 25-year, 20-year, and 10-year fixed.

The company also offers a typical selection of hybrid ARMs, including the 10/1, 7/1, and 5/1 ARM. The only obvious absence if the 3/1 ARM.

So they’ve basically got you covered when it comes to home loan options unless you’re looking for something super unique.

Ally Mortgage Rates Are Very Competitive on Jumbo

  • First things first, they actually advertise their rates on their website
  • Which is a nice sign of transparency
  • Their rates seem to be fairly middle-of-the-road for conforming loans
  • But really competitive when it comes to high-cost/jumbo loans so definitely check them out if you’ve got a big loan

One thing I appreciate about Ally is the fact that they openly advertise their mortgage interest rates, unlike a lot of other lenders.

So they win on transparency right off the bat. Now let’s determine if the advertised rates are any good.

As of the time of this writing (August 1st, 2018), Ally Home Loans was offering a rate of 4.75% on a 30-yr fixed with -0.22 mortgage points, with lots of assumptions like excellent credit, a $300,000 loan amount, and a minimum 20% down payment for a single-family home.

That negative amount of points means you get a credit toward closing costs, which is a good thing since a lot rates often require that you pay points out of your pocket at closing.

Interestingly, their jumbo mortgage rates seem to be significantly cheaper than their conforming ones, so it might be a good place to send a larger loan if you’ve got your eye on a particularly expensive property (or already happen to own one).

For example, they were offering a rate of 4.375% on a 30-year fixed for the same assumptions above, except for a loan amount of $650,000. Technically that’s just a high-cost conforming loan amount, but I won’t get into all that.

The point is they seem to specialize in larger loan amounts and offer really competitive rates on that front.

But even if their rate isn’t the lowest, they offer a so-called Price Match Guarantee where they’ll lower their rate/points to match those of a competitor. Oddly, they won’t go the extra step and beat them…hmm.

Ally Home Wants to Deliver a High-Touch Experience

  • As noted Ally wants to be your friend and more specifically your ally
  • That means you should get a lot of contact and guidance along the way
  • With a loan advisor, loan coordinator and closing coordinator there to assist
  • You can choose to receive updates via email or phone and dedicated support is available from application to close

Unlike a lot of mortgage newcomers, Ally Home wants to be super involved with you throughout the underwriting process.

They refer to it as a “high-touch experience” in which customers are guided through the entire home loan journey with a knowledgeable stable of so-called “dedicated loan experts.”

This runs counter to some of the fintech startups that cater to Millennials who apparently don’t ever want to speak to another human, ever.

That’s totally fine, but it appears Ally wants to bring back the human element and focus heavily on customer service with its group of loan advisors, loan coordinators, and closing coordinators known as the Ally Home Team.

This will include dedicated support, frequent loan updates, online access to all loan-related documents from any device, and a variety of communication options like text, phone, or e-mail.

Ally Home has also partnered with LenderLive to handle mortgage fulfillment, settlement and document services in an expeditious and compliant manner.

And most recently invested in Better Mortgage, another so-called “digital mortgage disruptor” in the space, to take advantage of their tech-heavy mortgage origination platform.

The hope is to provide the best possible mortgage experience by combining the best people with the best technology in the industry.

If you’re keeping track, three of the largest mortgage lenders during the prior boom have now risen from the ashes.

Former Countrywide execs successfully launched PennyMac, IndyMac transformed into OneWest Bank, and ResCap’s parent company has now introduced Ally Home.

It has been a pretty wild decade.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Before the 2008 housing crisis, home sellers would offer DPA to FHA borrowers and raise the sales price to cover the cost, creating exaggerated losses for the FHA program.

The housing environment is different today – where a lender has far less control over a home’s sales price and no control over the appraiser, according to a paper published by Ted Tozer, a non-resident fellow at Urban Institute and the former president and CEO of Ginnie Mae.

“By lifting this restriction to allow lenders to provide DPA, either through self-funding or through a grant program, policymakers could help remove the down payment obstacle for many families,” Tozer said. 

Lenders could provide DPA through two channels — the first channel through self-funding offered on an unlimited basis.

The lender could charge the borrower a 1% higher interest rate to fund a 3.5% down payment, which would allow the lender to issue a Ginnie Mae–guaranteed mortgage-backed security (MBS) that would generate enough of a premium to fund the required down payment, Tozer explained. 

These loans would still have access to all the features of the FHA streamline refinance program, allowing borrowers to reduce their payments if they stay on their new mortgage.

“Given the robustness of using premium-price Ginnie Mae MBS to fund the program, there wouldn’t be a need to limit its availability,” Tozer said. 

The second channel would be through a grant provided by the lender’s corporate funds. 

Since lender grants have limited funding, the programs could be restricted to specific income levels and priority markets, the paper noted.

Through this channel, borrowers would still have to pay mortgage insurance costs – which would come down to the difference between the private mortgage insurance that the GSE loans require and the 0.55% annual mortgage insurance premium required by the FHA. 

“The FHA could work with Congress to amend the FHA Modernization Act so only entities that can affect the home’s sales price are banned from providing DPA,” Tozer said.

As an alternative solution, Tozer floated the idea of making the FHA program a zero-down-payment program – a proposal first made by the George W. Bush administration in 2004.

“If this change were made, the FHA program would join the other government-insured programs offered by the U.S. Department of Veteran Affairs and the U.S. Department of Agriculture that do not require a down payment,” Tozer noted.

The paper’s suggestion to amend the FHA Modernization Act comes amid affordability pressures on first-time homebuyers.

The lack of homes for sale is driving up home prices and the 30-year fixed rates have been hovering near 7% in the past two months. 

“Housing affordability remains dangerously close to the 37-year lows reached late last year, despite the Federal Reserve’s attempts to cool the market,” said Andy Walden, Black Knight’s vice president of enterprise research. 

Source: housingwire.com

Apache is functioning normally

You found a house that fits your budget and wish list, and now it’s time to make an offer.

But questions remain. Is the property really worth the asking price? Are there hidden structural problems? Will your home loan application win final approval? Steps during the mortgage process — including an appraisal, a home inspection and underwriting — will provide answers, but in the meantime, you can include contingencies in your offer.

Making a contingent offer on a home

A purchase contract is legally binding, and breaking one can be costly. Making a contingent offer protects your interests in case unexpected issues mean you no longer can or want to buy the home. A contingent offer includes “walk-away” clauses, or “contingencies,” that let you get out of the deal and retrieve your earnest money deposit if certain conditions aren’t met.

Think of a contingency as an “if-then” proposition. For example: If the appraised value of the property is lower than the purchase price, then I can ask for a lower price or get out of the contract.

When working with your agent to write the offer, you’ll have to decide which contingencies to include. Your real estate agent can explain your options and make recommendations.

Although real estate contingencies protect your interests, be aware that too many stipulations in the contract can reduce the likelihood of the seller accepting your offer, especially in a tight market.

Types of real estate contingencies

Here are some examples of contingencies that can be included in home purchase agreements.

Inspection contingency

A home inspection contingency lets you negotiate the sales price, ask for repairs or walk away from the sale based on the inspection results.

Your contract may stipulate that repairs must be made if problems are uncovered, but that can lead to closing delays while the fixes are scheduled and approved. You may prefer to renegotiate the sale price if significant improvements are needed.

🤓Nerdy Tip

Sales contracts may also be written with “a right to void.” This means the buyer won’t require repairs suggested by the home inspection report but can cancel the sale without penalty.

In hot markets, buyers may feel pressure to forgo home inspections to win bidding wars. But this is risky, and there are other ways to strengthen an offer, such as being flexible on the closing date. A seller, for instance, may want additional time to move out.

Mortgage contingency

Unless you’re buying a home with cash, this contingency is necessary even if you’re preapproved for a mortgage. Preapproval is important, but it’s not an absolute guarantee. After a home is under contract, your loan still must go through a final stage of underwriting. If your financing falls through, a mortgage contingency gives you a legal out from the purchase contract.

Appraisal contingency

When a home appraises for less than the offer amount, your financing may fall through, or you may have to put more money down to buy the property. A property appraisal contingency lets you back out if the appraisal comes in lower than a certain amount.

Home sale contingency

Under a home sale contingency, your offer is subject to the successful sale of your current house. The contingency is most often based on a specific time period — such as 30 or 60 days — after which the contract is forfeited. You’re off the hook for buying the home, and the seller can entertain other offers.

Including a home sale contingency in a seller’s market puts your offer at a serious disadvantage. With lots of buyers competing for a limited number of homes, sellers are likely to get and choose offers without this condition.

Other contingencies

Other standard contingencies can include such things as a termite certification, a report showing clear title to the home and the definition of a reasonable time period to close the sale. But there may be additional conditions you want to include in an agreement.

Real estate contingency deadlines

Each contingency has an associated deadline. For example, a home inspection contingency would state a time frame for the inspection to take place and give the buyer a certain number of days to ask the seller to make repairs or lower the sales price.

Keep track of contingency deadlines so nothing sneaks up on you — and so you won’t miss an important date to enforce a condition the seller must meet. Having a calendar with all deadlines listed, perhaps even with pre-deadline notices a few days ahead, will help you stay on top of critical contingencies.

Throughout this process, you’ll want your agent to guide you; in more complicated cases, you may even want the advice of a real estate attorney. It’s easy to get tripped up by legal jargon, and sometimes what’s not in writing does the most damage.

Source: nerdwallet.com

Apache is functioning normally

When purchasing life insurance, it is important to have choices. As there are many various needs, policy holders can be better served by being able to essentially “customize” their plans in order to keep up with changes in their lives.

One of the most flexible forms of permanent life insurance is universal life. This type of coverage provides guaranteed death benefit protection, along with a fixed rate of interest on the cash value component of the plan. Cash in the policy can grow on a tax-deferred basis, and because of this, it can grow substantially over time.

Yet, universal life, or UL, also provides so much more than what is offered with more “generic” forms of permanent coverage such as whole life insurance. For example, with a universal policy, if the policy holder’s needs happen to change, then he or she may actually alter the policy to better fit their then-current scenario.  This greatly differs from whole or term life policies which are “locked-in” once the policy is in place.

How Universal Life Insurance Works

Universal life is a form of permanent coverage. This type of policy offers the policy holder death benefit coverage, as well as a cash value component. Yet, while this may sound very similar to whole life insurance, universal policies differ in many ways – starting with the fact that these policies can offer much more flexibility.

Similar to other types of permanent life insurance, the cash that is inside of a universal life insurance plan is allowed to grow on a tax deferred basis. However, the policy holder is allowed to move the funds between the cash value component and the insurance component of the policy.

What this means is that the policy holder can in essence change – within certain stated guidelines – the amount of the policy’s death benefit amount. In addition, the policy holder can also change the amount and the due date of the premium as well.

There are also more underlying options that are available in terms of allowing a universal policy holder’s cash value to grow. For example, policy holders can typically choose from a variety of different investment vehicles from both the fixed income and the equity investment markets.

Types of Policies

In addition to regular universal life, there are other variations of the product. For example, there are variable universal life and indexed universal life. Variable universal life insurance is a type of permanent coverage that offers both a death benefit, as well as cash value build up. Just like regular universal life, the policy holder can – within certain guidelines – change both the timing and the amount of the premium.

Rather than growing at a set rate of interest, though, with variable universal life, the funds in the cash component are actually managed professionally (unlike variable life policies that are managed by the policyholder) in underlying “subaccounts” and can be in entities such as stocks, bonds, and mutual funds. This can allow the opportunity for additional growth. However, it can also present more risk if the market has a negative return.

Overall, variable universal life insurance can provide policy holders with a number of different subaccount options – which can also include fixed option choices that have a minimum rate of interest. These policies also offer flexible premiums, payment schedules, and death benefit options.

#ap14647-wwfont-family:Archivo,sans-serif#ap14647-wwpadding-top:20px;position:relative;text-align:center;font-size:12px#ap14647-ww #ap14647-ww-indicatortext-align:right;color:#4a4a4a#ap14647-ww #ap14647-ww-indicator-wrapperdisplay:inline-flex;align-items:center;justify-content:flex-end;margin-bottom:8px#ap14647-ww #ap14647-ww-indicator-wrapper:hover #ap14647-ww-textdisplay:block#ap14647-ww #ap14647-ww-indicator-wrapper:hover #ap14647-ww-labeldisplay:none#ap14647-ww #ap14647-ww-textmargin:auto 3px auto auto#ap14647-ww #ap14647-ww-labelmargin-left:4px;margin-right:3px#ap14647-ww #ap14647-ww-iconmargin:auto;display:inline-block;width:16px;height:16px;min-width:16px;min-height:16px;cursor:pointer#ap14647-ww #ap14647-ww-icon imgvertical-align:middle;width:16px;height:16px;min-width:16px;min-height:16px#ap14647-ww #ap14647-ww-text-bottommargin:5px#ap14647-ww #ap14647-ww-textdisplay:none#ap14647-ww #ap14647-ww-icon imgtext-indent:-9999px;color:transparent

Ads by Money. We may be compensated if you click this ad.Ad

The indexed universal policy option allows policy holders the ability to own permanent life insurance protection, along with a cash value component that provides them with not just a guaranteed interest rate, but also with interest that is based partially on one or more market indexes such as the S&P 500.

With this type of policy, the policy holder may incur a cap that limits the maximum amount of growth that they can attain in a given period of time. However, in return for that, they are also provided with a minimum “floor.” This means that they are also protected against market losses – essentially guaranteeing them that they cannot lose any of their principal.

In many ways, indexed universal life insurance works in a similar fashion as most other types of coverage in that the policy holder pays their premium, and the net premium is then applied to the actual life insurance death benefit.

A portion of the premium is also credited to the policy’s “index” account, which is credited at the index growth rate. Over time, the cash in the policy’s cash portion can grow significantly – especially as the funds are protected against any downside market losses. Over time, the cash can grow substantially – and can be accessed via withdrawals or policy loans.

There are numerous benefits of owning an indexed universal policy. These can include having permanent death benefit coverage, provided that premiums are paid within the grace period and that the policy remains in-force.

As with most other universal life insurance policies, these plans also provide the flexibility to either increase or decrease the policy’s premium, within certain limits. In addition, the policy also offers the ability to increase the cash value portion, yet with downside protection. This can be viewed as a true win-win.

Considerations When Purchasing

When purchasing a universal policy, it is important to keep several factors in mind. First, there should be a good mix of different investment options to choose from for the policy’s cash component. This will help to both increase growth opportunity and to diversify.

It is also a good idea to check for policy guarantees. Most universal life insurance policies will provide at least some form of a guarantee regarding its investment options, as well as the minimum amount of premium that it will take to keep the policy in force. Likewise, it is important to ensure that the universal policy is flexible and can be adjusted in the future.

How Much Will a Policy Cost?

When determining the quote on a universal life policy, there are a variety of factors that are considered by the insurance company. This is because the insurer wants to determine whether it is taking on an appropriate amount of risk, and that it will not have to pay out a large amount of claim soon after it accepts an applicant for coverage.

Some of the key factors that life insurance carriers consider when reviewing an applicant for coverage include the following:

  • Age
  • Gender
  • Height and weight (primarily, weight as it pertains to the individual’s height)
  • Smoking status
  • Alcohol consumption
  • Marital status
  • Employment and income status
  • Overall health condition
  • Family health history
  • Hobbies (whether or not risky or dangerous hobbies such as sky diving or scuba diving take place)

In addition, policies that are “traditionally” underwritten, will typically require the applicant to take a medical exam, though if needed, we can find those carriers that will offer a policy for life insurance with no medical exam. This will entail meeting with a paramedical professional who will take a blood and urine sample. These samples will be tested for certain types of health ailments that could also pose certain risks to the company in terms of having to pay out a potential insurance claim.

Depending on the applicant’s overall health after all of the information has been reviewed, the insurance underwriters will be able to obtain a much clearer picture of the person’s risk status. At that time, a coverage determination can be made, as well as a premium price can also be determined.

If the individual is considered to be of “average” health – and will also likely have an “average” life expectancy given his or her health – then they will typically be rated as a Standard policy.

If, however, the individual has a slight health issue – but not enough to be declined altogether for coverage – then they will typically be rated as a Substandard. This means that they will still be offered coverage. However, that coverage will be provided at a higher premium rate.

Conversely, if the individual is in excellent physical and mental health, then it could turn out that the insurance company rates him or her as a Preferred. In this case, they will be able to obtain their policy at a lower than average premium rate.

For applicants who are declined for coverage due to health issues, there are other options for coverage. These can include going the route of a no medical exam policy or a guarantee issue policy. In these cases, an applicant will not be required to go through the medical examination in order to obtain a policy. While the premium for this type of coverage is typically much higher than for comparable coverage that is traditionally underwritten, it could be the only option in some instances.

How and Where to Get the Best Quotes

For those who want death benefit protection, along with additional benefits, universal life insurance should certainly be a consideration. These policies offer many advantages, such as:

  • Death benefit coverage – UL policies provide lifetime death benefit protection – provided that premium payments are made within the policy’s grace period.
  • Tax-deferred growth – The cash within the policy’s cash value component is allowed to grow on a tax-deferred basis. This can allow funds to increase exponentially, as tax will not be due until the time of withdrawal.
  • Interest rate guarantee – The cash in the policy’s cash value component is also provided with a guaranteed rate of interest. This means that the growth is guaranteed not to fall below a set level.
  • Flexibility – Because UL policy holders are allowed to change the amount and timing of their premium payment, these policies come with a great deal of flexibility to grow and alter as one’s coverage needs change over time.

When searching for the best universal life insurance quotes, it is important to ensure that you obtain several different options. This will allow you to compare the policy features – as well as the premium quotes – from a number of insurers, and then to decide on which option will provide you with the best scenario for you and your specific needs.

In doing so, it is typically best to work with an agency or company that has access to more than just one insurance company. When you’re ready to begin your search for universal quotes, we can help. We work with many of the top universal carriers in the market place today – and we can provide you with all of the important information and details that you need that can help you with your purchase decision. We can do so directly via your computer – and without the need to meet in person with an agent. When you’re ready to begin the process, just fill out and submit the form on this page.

. Our experts are happy to assist you with answering questions or concerns, or walking you step by step through the universal quote process.

We understand that the purchase of life insurance can be a big decision. That is why we want to ensure that you have all of the pertinent information that you need in order to make the right decision. We will assist you in the following ways:

  • Choosing the right type of coverage – whether it be term, whole life, or universal protection;
  • Determining the proper amount of death benefit
  • Finding the company that will offer you the benefit – and the premium quote – that will suit your needs, and your budget.

Source: goodfinancialcents.com