When I bought a home three years ago, the economic climate was different from today. Back then, a house would could be listed on Friday and a contract signed by Monday. It was easy to get a loan (too easy, in fact) and you could make every mistake in the book and still find yourself a home.
Despite the market differences, sound financial planning and a handful of smart moves will ensure that you won’t regret grabbing your piece of the American dream. This post isn’t going to go over the merits of buying versus renting or how you should pick a real estate agent. Instead, I’ll focus on the things you should do to prepare yourself before applying for a loan and then buying a home.
Don’t borrow money Your home will likely be the single largest debt you will take on and represents the greatest risk in the eyes of potential lenders. With lending rules tightening, it’s becoming more and more important that you make yourself look as safe as possible. Safe means as little debt as possible and as little access to credit as possible.
Don’t apply for any new credit cards. They could be offering some hot credit card offers of a hundred bucks to make one purchase or 0% balance transfer, but you must avoid it at all costs. That hundred dollars will cost you thousands, if not tens of thousands, over the life of your loan. Don’t buy a car. Don’t take advantage of 12-month 0% financing “same as cash” offers at Best Buy to get that new flatscreen HDTV you’ve been thinking of.
Don’t make any drastic changes Don’t shuffle your funds around, don’t change your bank, and most of all don’t change your job. This won’t necessarily affect your credit score (some banks will do a hard credit check, which negatively affects your score) but it will give the lender headaches when they try to decipher all the moves you’ve made.
Making large transfers will bring up questions of fund origins. Is this really your money or did you receive it as a gift? Why are you opening up new accounts and shifting your money when you expect to spend it soon? Such moves will result in more questions for you to answer, which takes energy and will prolong the review process. It’s not necessarily bad — just a pain.
The only exception to the “not necessarily bad” is the part about changing jobs. Lenders like stability; stability equals low risk. If you’ve been working with a company for thirty years (or even five), chances are you’re going to work there for a while. If you’ve been working with a company for three months, there’s no saying how long you will work there. Maybe you have a falling out and are fired, maybe you can’t hold a job, maybe you’re perfectly fine and will have a successful career there. All those maybes make lenders nervous. Avoid changes if you can.
Play house There are two crucial steps to “playing house” (financially). First, you need to correctly estimate your monthly payment. Remember that your monthly payment will include the mortgage, taxes, and homeowners insurance. You will also probably want to add a buffer for maintenance and repairs, as you likely will have both. In three years, my wife and I have spent at least $10,000 in repairs and improvements (windows, roof, carpeting).
Another bit of information to research is how the recent federal housing rescue bill or how local first time home-buyer assistance programs may apply to you. The federal housing rescue bill offers a 15-year zero interest $7500 loan in the form of a tax credit to new home buyers. In Maryland, first time home buyers get one half of the transfer tax waived, which can be up to 0.75% the sale price of the home. Both of those will play crucial roles in how you calculate your monthly payment.
The second step is actually playing by budgeting for the mortgage. If you are currently renting, deduct rent from your monthly mortgage payment, and transfer those funds to an account that offers high interest savings. A great place to put those funds is in a fund you designate for your downpayment. As the months pass, you will get a feel for how much you can comfortably afford rather than simply guessing.
This also serves another purpose: it will keep you within your house budget. The Realtor will likely want to show you homes that are outside of your price range. It’s always good to see what is a little above and a little below your range just to see what the difference in value is. By playing house, you have a more accurate feeling of how differences in the monthly payment will affect your lifestyle because you’ve lived it.
Sell or donate your junk Two things will happen when you buy your house:
You will be short on cash.
You will have to move.
By selling some of your junk now, you get a little extra cash, which will likely go towards all the little things involved with a home, and you have less stuff to move. Your wallet will thank you for the former and your friends — whom you will have bribed with pizza and beer to help you move — will thank you for the latter.
Sell or donate anything and everything you honestly can’t see yourself ever using on your new home. Good stuff to purge includes:
Old furniture
Books (do you really need to keep your college textbooks?)
Old clothes
Electronics equipment
Decorations and wall coverings
This will require a bit of intestinal fortitude and an honest assessment of your belongings. It’s difficult to sell or give away things with emotional value. That couch you’ve had since college or that poster you hauled all the way from home — they have emotional value. If you can think of a great place in your new home for it, keep it; if you really can’t (where will a ratty old couch go?), give it a new home.
Donation is a great solution if you’re on a time crunch because organizations like Goodwill or the Salvation Army will happily come and haul away your gently used items absolutely free (and you get a bigger tax deduction).
I hope this list of ideas has been helpful, these were some of the tricks I used when my wife and I bought our first home three years ago. Since then, it’s been a wonderful ride. Home ownership truly has been all it’s cracked up to be. You might be buying a house, but it truly becomes your home.
Avoid applying for new credit before shopping for your mortgage, so you can maintain the best possible credit score.
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Mortgage rates today are far from the historic lows that new homebuyers were able to score through 2020 and 2021. You can find competitive mortgage rates around 6% to 7% APR on average today, depending on the loan term.
But that doesn’t mean you’re out of luck if you’re shopping for a home in 2023. Even small differences in your mortgage interest rate can save you money over the lifetime of your loan. By taking the following steps to prepare a solid loan application and score the best possible rate you can, you’ll reap the benefits for years to come.
Like federal interest rates, there’s a chance mortgage rates could continue rising this year. Don’t wait to start comparing the best mortgage rates you can qualify for now.
3 ways to get the best mortgage rates
Here are three things you can do now to make sure you get a great mortgage rate.
Boost your credit score
The information you include on your loan application can make a huge difference in the loan terms you qualify for.
“Your credit score is still going to be the biggest factor in determining if you will get the best rate,” says Colin Zizzi, CFP, founder of Zizzi Investments.
Before you apply for a mortgage, check both your credit score (which you can often find online from your bank or credit card company) and your credit report. You can access your full credit report for free from each of the three major credit bureaus.
Comb through the reports for any errors that could be hurting your credit score. If it’s still not where you’d like it to be, start taking steps now to improve it — like reducing your overall debt balance and paying all your bills in full and on time. Also, remember to avoid applying for any new credit or loans before taking out a mortgage. The hard credit check could temporarily bring down your credit score and keep you from getting a top rate.
Explore the best mortgage rates available today that you may be eligible for now.
Consider different loan details
If you’re flexible on the details of your mortgage loan, you may be rewarded with the potential to get a lower interest rate.
For one, your loan term is a big factor to consider. Many lenders offer slightly lower rates on shorter 15-year mortgages than on 30-year mortgages. In fact, the average mortgage rate for a 15-year mortgage as of July 10 is more than half a percentage point lower than what’s offered for a 30-year mortgage, according to data from Bankrate. While a 15-year mortgage may carry higher monthly payments, you could pay less over the lifetime of the loan.
Another type to consider is an adjustable-rate mortgage or ARM. This type of mortgage generally starts with a lower rate that adjusts (up to a cap) over time. Certain types of homebuyers may also qualify for government-backed loans, which tend to offer among the lowest possible rates. However, these loans may have strict specifications that you’ll need to meet before you can qualify.
Shop around and compare
If you’re quoted an unfavorable loan rate from one lender, there’s no reason to settle for it — at least not without comparing what else you may qualify for. Plus, the earlier you get started, the better off you may be.
“As always, shop around with different banks and brokers, and do this well before starting to look at houses,” says Quinn Arnold, CFP, co-founder of Arnold and Mote Wealth Management.
Once you’ve settled on the best type of mortgage loan for you, start getting preapprovals and loan estimates from different lenders. It helps to do this after you’ve settled on your preferred term and loan type, so you can make a consistent comparison across different lenders. When you shop around for your mortgage within a 45-day window all the different credit checks that lenders make are also recorded as a single inquiry on your credit report, according to the Consumer Financial Protection Bureau.
Compare the top mortgage rates you may be eligible for today here.
The bottom line
Today’s mortgage rates are higher across the board than they once were. But taking steps to make sure you apply with the best possible credit score, researching the type of mortgage that best fits your needs and comparing multiple lenders can help you get a solid mortgage even in today’s higher rate environment.
With mortgage interest rates consistently rising, timing is also important. Locking in a great mortgage rate sooner rather than later can help you ensure you get the rates you’re pre-approved for before they increase again. Start your search by exploring today’s best rates here!
Historically low mortgage rates had their moment in the sun in 2020. They rested far below 3% for months before America’s economic rebound pushed them back up in the winter of 2021. But data released on Thursday from Freddie Mac showed that mortgage rates idled below 3% again for an entire month, even with solid first-quarter GDP figures and encouraging consumer spending numbers.
Mortgage rates may look fickle, but the Treasury market rules them. If the 10-year yield rises it’s most likely the result of inflation expectations picking up, and with them, mortgage rates. When the 10-year-yield drops, inflation expectations are falling. That’s the simple answer.
While America continues to emerge from the COVID-19 crisis, other parts of the world are very much in the thick of it. A COVID-19 variant first identified in India has even threatened the U.K.’s plans to end lockdowns, Prime Minister Boris Johnson said.
Because the market is still so uneasy globally, U.S. investors relaxed momentum on the bond market, leaving mortgage rates with a better outlook than expected. Most industry experts predicted that rates would have settled far above 3% by now.
“This may be the most complicated 10-year-treasury yield data the market has ever seen, but no matter how good the economic data is, COVID is still here,” said Logan Mohtashami, lead analyst at HousingWire.
“When you look at two other massive economies, Germany and Japan, Germany’s 10-year-yield is in the negative. Our bond yields look much better than theirs so we can’t in a sense be at a 3% mortgage rate when the gap between ours and Germany’s yields are too far apart. There has to be balance.”
Beyond the 10-year-yield, two other yields exist in the market: retail and wholesale that fluctuate in the primary and secondary market, respectively, and which both have tightened recently.
“The reasons for why those spreads might have tightened is simply less frenzied retail market profit margins have come down a little bit in the retail market, and investors are a little bit more willing to bear the optionality of mortgages on the Treasury,” said Bill Emmons, economist for the Federal Reserve of St. Louis.
In wholesale, buyers of federally guaranteed mortgage-backed securities (MBSs) factor two financial components into the price they are willing to pay for MBSs — compensation for the pure time value of the money being invested and compensation for the interest-rate risk associated with mortgage investments, Emmons explained.
While time value is typically approximated by the yield on a Treasury security of equivalent duration i.e. the 10-year Treasury, risk compensation is more effected by mortgage borrowers prepaying their mortgage principal at face value at any time without penalty.
“People that had been looking to invest in treasuries or MBSs last year when yields were so low they were struggling to generate the kind of income they need to fund their liabilities in some cases,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association. “When our yields look much more attractive than those of the rest of the world, mortgage rates get to a level on the investor side that generate a lot more interest, but we are going to go through periods where they plateau or dip back down as we watch the market.”
Keeping an eye on inflation
While investors study the bond numbers in other countries, the Federal Reserve’s adjustments on inflationary policies are keeping them just as busy.
In April, the Federal Open Market Committee left future economic policies virtually unchanged at its monthly meeting, indicating it has not made any near-term plans to taper its asset purchases of Treasury– and mortgage-backed securities while it awaited data on vaccine distribution, employment and inflation numbers.
The Fed mentioned that inflation had in fact “risen” but attributed the higher readings to “transitory factors.”
Overall, while March posted hopeful signs of a recovering economy, Fed Chairman Jerome Powell said it will take a string of good months before the Fed chooses to roll back any monetary policies.
“There is growing concern about what’s happening with inflation,” Fratantoni said. “Consumer inflation expectations are starting to increase as well so or the next couple of months bond investors are going to start to worry a bit more about both the impact of faster growth and faster inflation.”
Despite the lackluster unemployment report in April, the consumer price index still estimated inflation hitting 4.2% on a year over year basis. Typically, mortgage rates respond to this kind of data, and in theory, should have, given the historic number for core inflation as well.
When mortgage rates failed to pick up in the last month, savvy homebuyers jumped back on them. But even with rates slipping to previous lows, borrowers are still battling it out in the bidding trenches on overheated prices. April economic data for home sales showed year over year numbers are still above those in 2020, but beginning to dip sequentially.
“The inflation data should moderate as production levels catch up with the COVID-19 backlog,” Mohtashami said. “So, we have hotter-than-normal inflation data, and rates are still low, even with the rise of the 10-year yield. COVID-19 has kept global bond yields low in 2021, but for 2022, this no longer works as a legitimate reason.”
“The economic slowdown has resumed – whether the end result is a modest recession or simply a soft landing remains unanswered – although we continue to expect the former, as we have since April of last year, when we first made our 2023 recession call,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said.
“The greater-than-expected resilience of the housing sector to the affordability pressures of higher home prices and mortgage rates is central to our expectation that the recession will be modest,” he added.
However, the ongoing lack of existing homes for sale will continue to support demand for new homes, the group noted.
New home construction is expected to pull back later in 2023 – consistent with Fannie Mae’s forecasted recession – which is due, at least in part, to tighter credit availability for construction lending. Still, Fannie Mae expects new home sales to hold up comparatively well relative to existing homes.
“Homebuilders continue to show a willingness to offer rate buy-downs and other incentives to move their inventories. The past year’s pullback in the price of lumber and other materials also helps builders to maintain margins even with discounting, and we would expect them to continue to do so,” Fannie Mae’s ESR group said.
No additional bank failures have occurred since mid-March, and high frequency data from the Federal Reserve show that aggregate banking deposits have stabilized in the most recent weeks. This includes deposits at small banks, which were roughly flat — and even rose somewhat over the past two weeks.
Still, the prior bank failures and ongoing fallout took place during a period in which credit conditions were already tightening, so any additional marginal tightening may end up contributing to an eventual expected recession, the group explained.
Fannie Mae noted the continued pullback in longer-term interest rates relative to pre-banking turmoil, combined with a lack of accelerating inflation expectations, suggests that financial markets still anticipate that the recent banking crisis will be a drag — at least modestly — on economic activity.
With upgrades to both home sales and home price forecasts, Fannie Mae adjusted its forecast for mortgage origination upward. Total originations for 2023 are now expected to post $1.66 trillion, up compared to its previous forecast of $1.55 trillion. For 2024, Fannie Mae anticipates volumes of $2.02 trillion, an increase from its prior forecast of $1.89 trillion.
House prices, measured by Fannie Mae’s home price index, are projected to decline by 1.2% in 2023 on a Q4/Q4 basis from a previously expected 4.2% decline. In 2024, home prices will decline by a further drop of 2.2% compared to previous expectations.
In the past year, streaming service Netflix has released two financially focused offerings: the film “Get Smart With Money” and the series “How to Get Rich.”Both feature powerhouse financial influencers who help people reevaluate their approaches to money to educate and empower them. Here are four takeaways that you can apply to your own life, no matter your financial situation.
Takeaways From ‘Get Smart With Money’
The “Get Smart With Money”documentary features well-known financial writers, bloggers and podcasters who share their expertise on how to become better at managing money. Here are a couple of lessons they imparted.
1. Emotion management is key to money management
In “Get Smart With Money,” some of the featured participants were dealing with significant debt or with the challenges of living paycheck to paycheck. The stress, fear and frustration that come with money can significantly impact how you manage it.
Tiffany Aliche, a financial educator also known as The Budgetnista, talks through this fear and encourages people to face their money head-on to see what they owe and where they need to save more. If you’re afraid of your money, that’s going to affect how you manage your money, she says in the film.
2. Money is a tool to help you create the life you desire
Aliche tells one of the show participants to create a “dream fund,” a special savings account for goals outside of regular bills and emergency fund budgeting. This takeaway is a great reminder that money is meant to be used for things that will make you happy in addition to paying for daily expenses.
Takeaways From ‘How to Get Rich’
Ramit Sethi, author of bestselling book “I Will Teach You to Be Rich,” hosts this Netflix series and helps participants define their goals and make moves to achieve them. Here are some of the lessons and tips from the show.
3. Think about what makes you happy
One of the pillars of Sethi’s advice is the concept of “a rich life,” meaning the financial ability to do things that bring joy. He emphasizes that a rich life comes in many forms, like being able to take time off from work when you want to, fly in business class for long trips or even help a parent retire, as was the goal of one of the show participants.
Mindy Jensen, a host of financial podcast “BiggerPockets Money,” had an aha moment with Sethi when she was a guest on his podcast. Sethi’s podcast is separate from his Netflix show, but he emphasizes a lot of similar money guidelines. As Sethi discussed the concept of a rich life with Jensen and her husband — who are both financially independent, meaning they have enough money to pay their living expenses for the rest of their lives — they realized that even with their large net worth, they weren’t spending enough money to make life more enjoyable. After the conversation, the couple decided that they wanted to spend more money on travel with their two teenage daughters.
“We don’t need or want more things, but we want more experiences,” Jensen told NerdWallet.
Looking back on her journey to financial independence, Jensen also realized that there was more she and her husband could have done to start their rich life earlier.
“You can continue to contribute to your retirement accounts and investments, but it doesn’t have to be this frantic mad dash to the finish line,” she says. “You can do it a little slower and enjoy your life.”
4. Homeownership doesn’t have to be a financial goal
It can be hard to break away from the idea of homeownership as a major financial achievement. In America, the mythos of the “white picket fence” is often part of the way people describe success. Sethi’s perspective on homeownership, however, differs from popular convention. In “How to Get Rich,” he advises participants to keep in mind all of the additional costs that come with homeownership compared with what’s covered by a landlord.
Homeownership means that everything falls to you, on top of whatever you pay for your mortgage, home insurance, homeowners association fees and property taxes. If you find a rental that leaves enough room in your budget to allow you to invest more, the math can sometimes work out better for your net worth in the long run, Sethi says.
For people who are getting started on their financial journey — as well as those who are well on their way — these shows can provide inspiration and information about how to make your money work better for you.
This article was written by NerdWallet and was originally published by The Associated Press.
Transamerica is considered to be one of the world’s leading insurance and financial services companies. The firm offers insurance and investments to more than 19 million customers worldwide.
As Transamerica’s slogan suggests, the company – and its customers – are “Tomorrow Makers.” This is because the company strives to make its customers’ tomorrows everything that they plan for.
Who is Transamerica?
Table of Contents
Transamerica is a financial services company that provides insurance, investment, and retirement products and services.
It was founded in 1904 and is headquartered in Baltimore, Maryland. Transamerica is a subsidiary of Aegon, a multinational life insurance, pensions, and asset management company based in The Hague, Netherlands.
The History of Transamerica
The company has been in the business of providing insurance and financial advice for more than 100 years and it began its operation in 1904 when Amadeo Giannini started the Bank of Italy in a converted saloon in San Francisco, California.
He strived to make financial services available to everyone of all financial classes, not just the wealthy. His business really ramped up following the 1906 San Francisco earthquake when he was able to provide loans to residents for rebuilding their properties.
Several years later, in 1928, the company merged with Bank of America, and two years after that, it acquired Occidental Life Insurance via Transamerica Corporation. In 1956, the banking and life insurance companies were separated, with the insurance component maintaining the Transamerica name. Today, customers of Transamerica have access to a wide variety of insurance and financial products and services.
The firm is licensed to provide insurance in all U.S. states, and the District of Columbia, and it has approximately $223 billion of premiums in force. Transamerica has a roughly $29.5 billion in assets under management.
Products Offered By Transamerica
Transamerica offers a variety of products to both consumers and businesses.
On the insurance side, the company provides numerous options, including the following types of coverage:
Term Life
Term life insurance offers pure death benefit protection for a specific period of time.
This is typically 10 years, 15 years, 20 years, or 30 years. Should the insured pass away during the time that a term life policy is in force, the named beneficiary will receive the stated amount of death benefit.
Because term policies do not offer any type of cash value or savings component, the premiums for this type of coverage are typically more affordable than other, “permanent,” forms of coverage.
For example, you can get a $1 million term policy for less than 20% of a permanent policy with the same face value. Term life is sometimes referred to as “temporary” life insurance coverage as it is often used for covering temporary needs such as the balance of a mortgage.
Whole Life
Whole life insurance offers death benefit protection as well as cash value build up.
The funds that are inside of the cash value grow on a tax-deferred basis, meaning that no tax is due until the time of withdrawal. The cash grows at a guaranteed rate over time.
Whole life is considered permanent coverage because as long as the premium is paid, coverage remains in force – oftentimes for the “whole” of a person’s life.
Universal Life
Universal offers a death benefit protection as well as a cash value build up. However, it provides more flexibility than whole life in that the policyholder can choose to pay higher or lower premium amounts as their financial needs change over time.
The policy value may simply increase or decrease accordingly. Like with whole policies, the cash value is allowed to grow on a tax-deferred basis.
Variable Universal Life
Variable life, provides death benefit protection and cash value.
With variable universal life, however, the cash value’s return is based on underlying investments in market-related “subaccounts.” These can allow the funds in the account to grow a great deal – provided that the market moves upward. These accounts can also be riskier in a downward moving market.
Accidental Death
This can help to ensure that their loved ones will be taken care of should the unthinkable occur. (It is important to note that this benefit will not typically pay out in the event of death that is caused by sickness or other natural causes).
Final Expense
Final expense coverage focuses on paying for a person’s funeral and related expenses.
Today, the cost of a funeral – including the burial plot, headstone, and other related expenses – can exceed $10,000. Unfortunately, many families are not able to pay these costs immediately upon the death of a loved one.
Having final expense insurance allows for a way to do that – eliminating stress on loved ones, in an already stressful and emotional time.
Key Man Life
What is key man life insurance you ask?
Key person insurance is a form of business insurance that people can overlook, but one that can make all the difference in keeping a business or firm successful in the face of losing an owner, or important team member.
In addition to life insurance, Transamerica also offers a number of other financial products, including long-term care insurance, annuities, and retirement/investment savings options for those who are planning for retirement, as well as those who are already there.
Financial Strength Ratings of Transamerica
Transamerica has been given very good ratings by the insurer rating agencies.
These ratings include the following:
A.M. Best
Moody’s Investor Services
Fitch
Standard & Poor’s
A+
A1
AA-
AA-
Is Transamerica a Legit Company?
Yes, Transamerica is a legitimate company. It is a subsidiary of Aegon, a multinational life insurance, pensions, and asset management company. Aegon is rated highly by financial rating agencies such as Standard & Poor’s, Moody’s, and Fitch Ratings.
Transamerica has been providing insurance, investment, and retirement products and services since 1904 and is regulated by state and federal government agencies.
Biggest Risks Choosing Transamerica for a Life Insurance Policy?
Choosing a life insurance policy, including one from Transamerica, comes with certain risks. Some of the biggest risks to consider include policy lapse, which occurs when you fail to pay the premium on time and could result in losing coverage.
Another risk is market risk, which refers to the performance of any investments within the policy, such as a cash value component, that can be subject to market fluctuations and result in losses.
Misrepresentation is another risk to consider, as providing incorrect information on your life insurance application could result in your policy being denied or not paying out as expected in the event of a claim.
Lastly, it’s important to make sure the life insurance policy you choose is appropriate for your needs and financial situation, as Transamerica offers a range of policies.
Advantages and Considerations
When seeking life insurance, it is important that the insurer is able to offer choice and flexibility – especially such that it meets with your specific needs. Many have the misconception that they cannot find a policy for them because of their lifestyle choices, such as one looking for life insurance for a smoker, there are options out there for you and I can help with finding the best for your needs.
Transamerica provides an extremely flexible and diverse product line up, including:
Term
Whole
Universal
Variable
Final Expense
Accidental Death
This, coupled with the company’s excellent customer support team can make for a nice mix – especially for customers who may need assistance in figuring out the details in terms of how much to purchase and what type of coverage may be best for their specific needs.
In addition, Transamerica’s policies also come with a nice assortment of riders – which can make their plans even more customizable. For example, the firm offers an estate protection rider that can help in protecting loved ones from estate tax obligations that may arise from the payment of the policy’s own death benefit.
The company’s website provides additional information on both policies and policy riders so that interested potential applicants can obtain more information on how these may work in their specific scenario.
Yet, even with all of the good, there are some considerations that should be taken into account when searching for coverage – especially when doing so through just one single insurer. This is especially the case if you have certain health issues, such as searching for best life insurance rates for smokers and/or you possess other factors that may deem you as being a higher risk applicant. This may lead you to need to look into a company that offers no medical exam life insurance policies.
In these cases – or in any case – it is always good to do some comparison shopping. Otherwise, you are essentially “locked in” to whatever price the insurer presents you with. This can be somewhat similar to only going to one car dealer or one computer dealer when shopping for these items, and never even checking prices elsewhere before moving forward with your ultimate purchase. With this in mind, regardless of how good the product, it always makes good sense to shop around first.
How and Where to Get the Best Life Insurance Coverage for Your Needs
When you’re in the process of searching for the best life insurance coverage – regardless of your current health condition or status – it is important that you compare the type of policies that are available to you, as well as the premium cost from different carriers.
This is because there could be a significant variation between one insurer and another – even for the very same type and amount of coverage.
Transamerica is a financial services company that provides insurance, investment, and retirement products and services. It has a long history, having been established in 1904, and is a subsidiary of Aegon, a multinational life insurance, pensions, and asset management company.
One of the strengths of Transamerica is its broad range of products and services, which includes life insurance, annuities, mutual funds, and retirement plans. This allows customers to choose from a variety of options to meet their financial goals and needs. The company has a strong online presence, offering convenient access to account information and resources, as well as easy policy management and premium payment options.
Cost and Fees
Customer Service
User Experience
Overall
3.8
Pros
Wide range of life insurance products: Transamerica offers a variety of life insurance products, including term life, whole life, and universal life insurance, which allows customers to choose the policy that best suits their financial goals and needs.
Strong financial stability: Transamerica is a subsidiary of Aegon, a multinational life insurance, pensions, and asset management company, which has a strong financial position as indicated by its highly rated financial standing from credit rating agencies.
Convenient online services: Transamerica provides a convenient online platform for policy management, which includes access to account information, policy details, and premium payment options.
Professional support: Transamerica has a team of trained professionals who can help you understand the policy options and select the one that best suits your needs.
Cons
Potential policy lapse risk: If you fail to pay the premium on time, your life insurance policy may lapse, which can result in the loss of coverage and any accumulated cash value.
Market risk: Depending on the type of policy, there may be investment components within the policy that are subject to market risk, meaning that the policy’s value can decrease in value.
Complexity: Some of Transamerica’s life insurance products, such as universal life, can be complex and may require a higher level of understanding and management to ensure that you are making the most of your coverage.
Premium costs: The premium costs of Transamerica’s life insurance policies may be higher compared to other insurance companies, and it’s important to consider your budget when choosing a policy.
STATEN ISLAND, N.Y. — Filing for bankruptcy isn’t usually the first choice for people who find themselves drowning in debt. But sometimes it’s the only avenue for getting back on track with your finances.
While a bankruptcy can alleviate your debt, it also puts a major scar on your credit score. But the good news is that blemish on your credit isn’t permanent. And if you pay your bills on time following a bankruptcy, you can gradually rebuild your credit to get approved for credit cards, home loans and more.
We sought advice from Karra L. Kingston — a bankruptcy lawyer on Staten Island and in New Jersey who has helped hundreds of people get out of debt — to find out how past bankruptcies will impact your ability to buy a home.
Q. Will I ever qualify for a mortgage after filing For bankruptcy?
Kingston: “Most people who file for bankruptcy are able to qualify for a mortgage after filing. However, what you qualify for and how long you have to wait will depend on your unique situation.
If you have filed a Chapter 7 bankruptcy, the typical waiting period for a conventional loan is four years from when the court discharged your debt. Typically, this will give you time to work on repairing your credit.
Government backed loans generally have less waiting periods. For first-time homebuyers, a Federal Housing Administration [FHA] loan or a VA [Veterans Affairs] loan will [require] you to have to wait two years from your bankruptcy discharge.
If you filed a Chapter 13 bankruptcy, most of the same waiting period applies. One exception to this is that government-backed loans, like a USDA loan, only requires a one year waiting period. While FHA and VA loans can generally be applied for after the Chapter 13 discharge.
There is a misconception that once you apply for bankruptcy, you can’t get a mortgage. This is completely false. There is no law or rule stating that people who file for bankruptcy can’t be approved for a new mortgage. Bankruptcy laws were enacted to help people start over.
To ensure that you get a decent mortgage rate after filing for bankruptcy, it is important to take the proper steps to rebuild your credit score. This means paying your bills on time each month.”
If you have a financial question you’d like answered, please send to [email protected]and we’ll find the right expert to answer your question.
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NYC’s Mansion Tax: Your home doesn’t have to be a mansion for the $10,000+ tax to apply
National Association of Realtors’ chief economist Lawrence Yun says home sales are likely to hit a 12-year high this year as builders race to meet demand for entry-level homes from first-time buyers.
While existing home sales are likely to remain flat this year, new home sales should top 667,000, which would be the highest number since the beginning of the financial crisis in 2007, Yun said last week.
Yun also said he expects a change in U.S. migration patterns as many buyers give up trying to find an affordable home in the nation’s pricier markets, and instead relocate to more affordable areas. These people may be encouraged by a growing housing inventory in many U.S. markets, which has led to affordability falling in some areas. Yun said he expects this trend to continue for the rest of the year.
“While affordability has been sliding, it is still better than we saw in the year 2000,” Yun said. “This is due to much lower mortgage interest rates today.”
One reason for the improved affordability is that incomes have been rising at a pace that’s faster than that of home price growth, Yun said. He cited data from Sentier Research that shows incomes have been climbing steadily since a post-recession bottom in 2011.
“With strong job creation, wages are growing at a faster pace,” Yun said. “Finally, wages and home prices are aligning.”
The mix of new home sales will shift towards the more affordable end of the spectrum, resulting in a lower median purchase price, Yun said. He predicts that the median new home price will fall by 2.8% to $317,000 this year. Further, he said new home sales will grow by 7.9% in 2020 to 720,000 units.
Prices for existing homes probably will gain 2.3% in 2019, and 3.3% in 2020, Yun said. That’s a slower pace than 2018’s 4.9% increase.
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
GMAC reported a first quarter loss of $675 million thanks to elevated credit-related costs, valuation adjustments on mortgage servicing assets, and weaker performance on both auto and mortgage loans.
“The effects of a soft economy and weaker credit performance on legacy assets continued to put pressure on GMAC’s financial performance in the quarter,” said GMAC Chief Executive Officer Alvaro G. de Molina, in a release.
“We continue to manage through this economic cycle and focus on strengthening operations for the long-term.”
Despite the poor performance of existing mortgage assets, losses in the company’s mortgage division were only $125 million during the quarter, compared with $859 million a year ago, partially offset by a gain of approximately $900 million from the extinguishment of debt.
The mortgage lender saw loan origination volume of $13.2 billion during the quarter, compared with $8.2 billion in the fourth quarter of 2008 and $18.7 billion in the first quarter of 2008.
However, GMAC said margins improved due to higher government production and the record low mortgage interest rates have boosted rate and term refinance interest; the company also re-entered the jumbo loan market, though on a restrictive basis.
GMAC is participating in the Home Affordable Modification Program as well, with 10,000 financial packages already distributed to potentially eligible homeowners.
“There were also several signs of progress to mention, such as expanding retail auto lending, maintaining our commitment as a leader in wholesale financing, re-entering the prime jumbo mortgage market, and increasing bank deposits by about $3 billion from the end of the year,” added Molina.
Last September, GMAC’s Residential Capital announced it would close 200 GMAC Mortgage retail locations and cease lending its wholesale subsidiary Homecomings Financial.
Months later, the company got the okay to become a bank holding status at the eleventh hour, which helped it stave off potential bankruptcy with the help of much needed TARP money.
While foreclosures might sound like old news, there are still a ton of borrowers either behind on mortgage payments or in the process of foreclosure.
And it doesn’t appear as if the type of loan they took out was the problem. It’s just the fact that they took out their loan at exactly the wrong time.
And by that, I mean most borrowers facing foreclosure these days are underwater on their mortgages, and deeply underwater at that, possibly because they purchased homes at the height of the market.
That brings us to a new report from Black Knight Financial Services, which revealed that borrowers in negative equity positions accounted for 77% of all active foreclosures, per their latest Mortgage Monitor for the month of March.
So while some might just be having trouble with monthly payments because of a job loss or an illness, or simply because they took on too much mortgage, most are behind because their property values are in the red.
It might be conjecture to say that, but it’s clear there’s little incentive to keep paying an underwater mortgage, especially if it’s still underwater after all the recent home price gains.
Put simply, it makes sense that 29% of underwater borrowers are seriously delinquent on their mortgages.
Cheaper Homes 9X More Likely to Be Underwater
Black Knight also found that borrowers who own the bottom 20 percent of homes by price are nine times more likely to be underwater when compared to those in the top 20 percentile.
In other words, high-end homes have largely avoided the negative equity crisis that has plagued the rest of the market.
This could be a combination of higher down payments, more affluent borrowers, and better performance (rebounding) of higher-end homes.
Overall, their data show that slightly more than eight percent of all borrowers are currently underwater on their mortgages.
The good news is we’ve seen a near-30% decline in the negative equity rate from a year earlier.
The bad news is one of every three borrowers currently in the process foreclosure has a loan-to-value ratio of 150% or more.
For the record, Nevada and Florida continue to lead the country in terms of negative equity rates, with 16.4% and 15.1% of borrowers underwater, respectively.
And Florida and California have the highest number of underwater properties.
Mortgage Delinquencies See Largest Drop in Nine Years
The mortgage delinquency rate has also improved immensely, and though seasonal declines are typical in March, the 12.18% drop seen this year was the largest monthly decline in nearly a decade.
Additionally, declines have been witnessed in all stages of delinquency (30, 60, 90 and 120+ day lates).
In fact, 30-day delinquencies hit their lowest level in over 10 years. And for every 10,000 loans that were current at the end of February, just 73 missed a payment in March, the lowest current-to-30 day late roll rate in over 15 years.
Roll rates from 30-to-60 and 60-to-90 days delinquent also fell to their lowest levels in nine years, and loans that were previously delinquent are curing (becoming current again) at the highest clip since 2005.
So while underwater loans persist, new problem loans seem to be few and far between.
Separately, the MBA reported today that the delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 5.54% as of the end of the first quarter.
This is the lowest recorded rate since the second quarter of 2007.
Meanwhile, just 2.22% of loans were in some stage of foreclosure, down from 2.65% a year earlier, the lowest foreclosure inventory rate since the fourth quarter of 2007.
So it looks as if things are nearly back to normal, though certain areas of the country continue to suffer disproportionately.
The scary part is that NAR thinks home prices are overvalued again, but if prices dip again negative equity-related problems could resurface.