Typically, it does not cost the borrower money to refinance student loans. Most lenders do not charge origination fees or application fees. However, you can end up paying fees if you don’t make your payments on time.
In the right circumstances, refinancing your student loans can help you save both time and money as you work to pay down your student debt, without costing you any money to do so.
Student Loan Refinancing Recap
Student loan refinancing is the process of paying off one or more existing student loans with one new one through a private lender. You can typically refinance both federal and private student loans, and depending on the terms of your current loans and your creditworthiness, you may be able to get a lower interest rate or lower monthly payment.
This process is different from federal student loan consolidation, which involves combining several eligible federal loans into one new loan with a federal loan servicer. While that process can simplify your repayment plan and help you maintain federal loan protections, it typically doesn’t help you save money.
Every situation is different, but with the right refinance loan, you could save hundreds or even thousands of dollars as you pay down your student debt.
That said, there are both benefits and drawbacks to consider before you pull the trigger.
Pros of Student Loan Refinancing
Can Save You Money
If you qualify for a lower interest rate than what you’re currently paying, refinancing your student loans could save you money on interest over the life of the loan. Keep in mind that this includes keeping the loan term the same. If you extend your loan term, you could end up paying more in interest, even with a lower rate.
If you don’t qualify for a lower rate on your own, you may be able to add a cosigner with solid creditworthiness to help improve your chances.
Can Give You More Flexibility
Student loan refinance lenders typically offer a range of repayment terms, allowing you to shorten or lengthen the amount of time you have to pay off your debt.
Simplifies Your Repayment Plan
If you have multiple student loans across more than one servicer or lender, refinancing them all into one new loan can make repayment a little easier.
Cons of Student Loan Refinancing
You’ll Lose Federal Benefits and Protections
If you have federal student loans, refinancing with a private lender will cause you to lose certain benefits and protections, such as access to income-driven repayment plans, federal loan forgiveness programs, and more.
It May Not Save You Money
If your current interest rates are already low, it may be tough to qualify for something even lower. Also, applying for a longer repayment period than what you already have could end up costing you more in interest over the life of the loan.
You May Get Less Help When You’re Struggling
Federal student loans allow you to apply for student loan deferment or forbearance if you’re struggling to make your payments. When you refinance with a private lender, you may not get these same benefits.
Deferment and forbearance options can vary by private lenders. With SoFi, for instance, you may qualify for a deferment if you return to graduate school on a half-time or full-time basis, undergo disability rehabilitation, or serve on active duty in the military.
How Much Does It Cost to Refinance Student Loans?
Refinancing student loans with a private lender typically does not come with any costs to the borrower. Most companies do not charge any fees associated with student loan refinancing. If you are being charged fees (see below), you may want to look elsewhere for your refinance.
Common Fees When Refinancing Your Student Loans
If a lender does charge fees for refinancing, these are some you may run into:
• Application fee: This fee covers the cost of processing the application and is typically due when you submit your application.
• Origination fee: Some lenders charge this fee to help cover the costs of processing your loan and disbursing the funds.
• Late payment fee: Many lenders charge this fee if you miss a payment. Depending on the lender, you may get a grace period between your due date and when the fee is assessed.
• Returned payment fee: If you try to make a payment but don’t have enough money in your checking account to cover it and no overdraft protection, some lenders may charge you a fee for the failed transaction.
In most cases, you won’t have to pay anything up front to refinance your student loans. With SoFi, there are no application fees, no origination fees, no late fees, and no prepayment penalties.
As you’re shopping around, make sure you read the fine print to understand the cost of refinancing student loans with that particular lender.
Serious savings. Save thousands of dollars thanks to flexible terms and low fixed or variable rates.
Reducing the Cost of Refinancing Student Loans
Because many student loan refinance lenders don’t charge upfront fees, shopping around with those costs in mind can help you improve your chances of finding a low- or no-costs lender.
Keep in mind, though, that some lenders may charge what are called “hidden fees.”
Instead of showing up in marketing material, these fees are often buried deep in the terms and conditions of the loan and can be tough to find if you’re not looking for them.
Taking the time to thoroughly read the terms and conditions before refinancing could help you avoid unexpected fees down the line.
If you get approved for the new loan, you might consider setting up automatic payments to help avoid missing a payment and getting charged a late fee. Some lenders, including SoFi, offer an interest rate discount to qualified borrowers using autopay.
Then, you might make it a goal to always have a buffer in your checking account or overdraft protection to ensure a payment doesn’t get returned.
Considering SoFi to Avoid Upfront and Hidden Costs
If you’re considering refinancing your student loans, shopping around can take time. When refinancing with SoFi, you don’t have to worry about paying upfront costs or hidden fees.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
FAQ
Does it cost money to refinance loans?
No, it does not cost money to refinance student loans. Most student loan refinance lenders do not charge fees associated with refinancing — including application fees and origination fees. If you are being charged a fee to refinance, that could be a red flag and you may want to look elsewhere.
What is a finance charge on a student loan refinance?
On a student loan refinance, a finance charge is what you pay the lender beyond the principal balance. This would include interest and any fees associated with the loan.
How much does it cost to consolidate student loans?
If you want to consolidate your federal student loans, there is no application fee associated with a Direct Consolidation Loan. It does not cost the borrower anything to consolidate federal loans.
SoFi Student Loan Refinance NOTICE: The debt ceiling legislation passed on June 2, 2023, codifies into law that federal student loan borrowers will be reentering repayment. The US Department of Education or your student loan servicer, or lender if you have FFEL loans, will notify you directly when your payments will resume For more information, please go to https://docs.house.gov/billsthisweek/20230529/BILLS-118hrPIH-fiscalresponsibility.pdf https://studentaid.gov/announcements-events/covid-19
If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income based repayment plans or extended repayment plans.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
There’s nothing worse than finding your dream apartment only to discover that you don’t quite meet the income requirements to qualify. Maybe you have poor credit or maybe you don’t make enough money each month to cover the rent. Whatever the reason, you know that you’re not quite what the landlord is looking for in a tenant. If you still have your heart set on that unit, you can bring in a co-applicant.
But there are benefits and drawbacks to co-applicants that you should know and consider before going down that road.
What is a co-applicant?
A co-applicant is an additional person you add to the rental application and resulting lease agreement for an apartment. If you have poor credit or your finances are in shambles due to recent bankruptcies, they boost your application with their improved assets like income or a great credit score.
Along with you, they jointly sign and bear the financial responsibility for paying rent for the apartment for the entire lease term. You both sign the lease agreements and are equally responsible for the apartment’s costs, but there is typically a primary applicant and then a secondary co-applicant. Think of it as a co-borrower when taking out a loan. You’re both taking out a stake to live in this apartment complex, and you’ll both be on the hook for costs. They also have the same rights to live in the apartment as you.
Both you and the co-applicant will need approval from the landlord. You’ll both need to submit apartment applications with all your personal information, rental history and employment history. The landlord will also need to run a background check and credit check to retrieve information on both you and the co-applicant to make sure you both qualify.
What is the difference between a co-applicant, a co-signer and a guarantor?
Terms like co-applicant, co-signer or guarantor are sometimes used interchangeably during the process of applying for a rental property. But in fact, there are key differences that separate all three. It’s also important to know and understand the differences between the three types in case you still need a third party to sign your lease but don’t necessarily want to live with that person.
Co-signer
A co-signer is a third-party person who signs a lease agreement along with the applicant, but they generally won’t live on the property. Similar to a co-applicant, they do have the right to live in the apartment or have access to it. People usually ask family members or friends to act as their co-signer and help vouch for them as tenants.
A co-signer is an insurance policy of sorts. By co-signing the lease, they’re guaranteeing that they’ll cover the rent in the event that the tenant fails in their responsibilities or falls behind on regular payments. For younger applicants just starting out who don’t have a good credit score or a well-paying job, many landlords prefer the stability of having someone co-sign.
Guarantor
A guarantor is a person who also signs the lease as a third party, but they aren’t entitled to live on or have access to the unit. Their relationship to the agreement is strictly financial, guaranteeing that either you or they will pay rent each month.
What are the pros of getting an apartment with co-applicants?
There are all sorts of benefits to renting an apartment with a co-applicant, from companionship to having someone to help with monthly rent payments.
Improves the odds of having your application accepted
Do you know that saying that two heads are better than one? Well, if you have bad credit or your monthly income is too low, two applicants are far better than one.
When you apply to an apartment with a co-applicant, their credit history, income and other assets are jointly considered along with yours. If you’re adding someone with more financial stability and overall better financial standing than you, it can greatly improve your odds of being accepted for the apartment.
Having someone to help pay rent
If you’re going to live with your co-applicants, odds are you’re both going to pay rent. With rental rates climbing ever higher, having someone to split the cost of the rent payment is a big money-saver.
Having an emergency fallback
Life happens and sometimes you come up short on rent on the first of the month. Knowing you have someone else you can turn to for help not only reduces stress but ensures you stay on good terms with the landlord and don’t have late payments added to your record.
Potentially lowers costs
Bringing on a co-applicant with excellent credit history can also help you save money. A good credit history shows that the co-applicant is financially responsible and more likely trustworthy. This can incentivize the landlord to reduce some fees like the security deposit.
Getting to live with someone else
Whether friend, partner or family member, living with someone you know and get along with has far more than financial benefits. It gives you the chance to create wonderful memories during a certain chapter in your life.
What are the cons of leasing an apartment with a co-applicant?
At the same time, you want to use care on who you sign a binding legal contract. People can reveal a whole different side of themselves when they move in. That’s true even individuals you’ve known for years like friends or partners.
That’s why it’s important to consider the ramifications of adding a co-applicant to the application process. It’s also why you shouldn’t simply sign a lease with someone you don’t know that well.
They have the same legal rights to the apartment
Co-applicants have the same rights to the apartment as you since both yours and their names are on the lease as co-signers.
If they don’t make sure that their share of the rent gets paid, you could be on the line for repayment.
Late or missed payments could damage the credit of both applicants
If you’re the primary applicant for the property and your co-applicant doesn’t pay their share of the rent, it could hurt your credit. Their credit will also be impacted.
Your relationship with the co-applicant could be impacted
If things go south between you and the co-applicant, it’s more than your finances that could be impacted. It could damage your relationship. That’s why one of the key takeaways in this debate is that you need to fully understand the ramifications of signing a legally binding document to live with someone.
Carefully consider who you want as your co-applicant
It’s all well and good to need someone to act as a fail-safe to help you get started as a renter. A co-applicant can bolster you. But, they can also become a hindrance if they’re not reliable since they have the same rights to the apartment.
Zoe Baillargeon is an award-winning writer and journalist based in Portland, Oregon, where she covers a variety of beats including travel, food and drink, lifestyle and culture for outlets like Apartment Guide, Rent., AFAR.com, Fodor’s, The Manual, Matador Network and more. In her free time, she enjoys traveling, hiking, reading and spoiling her cat.
When it comes to purchasing a home, buyers may find it difficult to find financing beyond the conforming loan limit. In this instance, you may need to apply for a jumbo loan.
What is a jumbo loan?
A jumbo loan in Kentucky is a type of mortgage that is used to finance homes that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Oftentimes, this type of loan is necessary for high-end, luxury homes or homes located in expensive housing markets.
If the home you’re purchasing will require you to borrow more than the conforming loan limit (CLL), you’ll need to apply for a jumbo loan. However, keep in mind that jumbo loans come with higher interest rates and stricter requirements than conventional loans due to the larger loan amounts and risk associated with them. For instance, a larger down payment and a higher credit score may be required to qualify for a jumbo loan in Kentucky.
What is the jumbo loan limit in Kentucky?
In Kentucky, the conforming loan limit is $726,200 across all counties. For example, the conforming loan limit in Jefferson County is $726,200, so if the loan amount needed is even one dollar more than this amount, it’s considered a jumbo loan.
As a reminder, the loan amount is what determines whether or not you’ll need a jumbo loan, not the price of the home you’re buying. So, if you were to put $50,000 down on a $750,000 home in Louisville, the mortgage would be $700,000, which is under the conforming loan limit for this area. In this case, your loan wouldn’t be considered a jumbo loan.
To identify the conforming loan limits where you’re considering buying a home in Kentucky, check out this FHFA map.
What are the requirements for a jumbo loan in Kentucky?
As previously mentioned, the requirements for a jumbo loan are much more stringent than the requirements for a conforming loan. Each lender may have different requirements or processes, but below are the typical requirements for borrowers seeking a jumbo loan.
Higher credit score: When it comes to jumbo loans, lenders generally look for a credit score of 720 or above to qualify a borrower. While some lenders may accept a score as low as 660, this is typically the lowest score for qualification.
Larger down payment: Buying a high-priced home often requires a larger down payment from the buyer. Conforming loans may offer programs for down payments as low as 3%- 5%, but jumbo loans require a minimum down payment of 10%, with some lenders requiring up to 30%. If the homebuyer puts down less than 20%, they will likely need to pay for private mortgage insurance (PMI).
More assets: Jumbo loan borrowers are typically required to have additional assets. In particular, lenders may require borrowers to demonstrate sufficient liquid assets or savings to cover one year’s worth of loan payments.
Lower debt-to-income ratio (DTI): When applying for a jumbo loan, Kentucky lenders typically look for a borrower with a debt-to-income ratio (DTI) below 43%. Ideally, a DTI closer to 36% or lower is preferred. The DTI is calculated by dividing the sum of all monthly debt payments by gross monthly income. A lower DTI signifies a borrower’s ability to manage their current debt load while taking on additional mortgage payments. It also indicates greater financial stability and the ability to make on-time payments towards their jumbo loan.
Additional home appraisals: Your lender may require a second home appraisal for a jumbo loan, in addition to the standard appraisal, to get a second opinion on the property’s value. This is especially true in places with limited comparable property sales. The second appraisal helps lenders ensure that they are providing funds for a property that is worth the loan amount or more.
Are you dreaming of owning a piece of the American Southwest? Arizona, with its vibrant desert landscapes, sunny weather, and diverse cultural attractions, offers an irresistible allure for those seeking a new place to call home. However, before embarking on this exciting journey, it’s essential to understand the homebuying process specific to the Grand Canyon State. From navigating local regulations and financial considerations to finding your perfect abode in a downtown Phoenix condo or a serene house in Gilbert, this Redfin article will serve as your comprehensive guide to buying a house in Arizona.
So, fasten your seatbelts as we explore the steps, intricacies, and tips to make your Arizona homebuying experience smooth and successful.
What’s it like to live in Arizona?
With its year-round sunshine and warm climate, Arizonans enjoy an outdoor-centric lifestyle by hiking, golfing, and exploring the vast desert landscapes. The state is also home to several renowned national parks and monuments, including the breathtaking Grand Canyon and the stunning red rocks of Sedona, providing endless opportunities for adventure and exploration. Arizona is also known for its intense summer heat, and protecting yourself and your property when living there is essential. Check out this article to learn more about the pros and cons of living in Arizona.
Arizona housing market insights
The Arizona housing market is experiencing some notable trends and shifts. The median sale price currently stands at $436,100, showing a 6.2% decrease compared to the previous year. Several cities in Arizona have emerged as competitive real estate markets, including Pinetop, Flagstaff, and Cottonwood. Popular cities in the Phoenix area, such as Scottsdale, Chandler, and Gilbert, are also witnessing significant growth and attracting prospective homebuyers. However, the housing supply in Arizona has decreased by 4.7% year-over-year, indicating a tightening market. These data points suggest a dynamic and evolving housing market in Arizona, with fluctuating prices, competitive cities, and limited supply, all of which have implications for buyers.
Finding your perfect location in Arizona
For several reasons, selecting the perfect location for buying a house in Arizona is vital. First and foremost, Arizona offers diverse landscapes and communities, each with its unique charm and amenities. By carefully considering your desired location, you can align your lifestyle preferences with the area’s offerings. Additionally, the location of your home greatly impacts factors such as commuting time, access to essential services, quality of schools, proximity to recreational opportunities, and potential appreciation of property value over time.
If you’re unsure where to start, using tools like a cost of living calculator can help you determine what cities are within your budget. We’ve put together a glimpse of the five popular cities, so you can get an idea.
#1: Tucson, AZ
Median home price: $330,000 Tucson, AZ homes for sale
Moving to Tucson offers a unique and vibrant experience that blends desert beauty, cultural richness, and a relaxed atmosphere. Outdoor enthusiasts can delve into the picturesque trails of Saguaro National Park, embark on invigorating hikes or bike rides in the nearby Catalina Mountains, or indulge in a round of golf on world-class courses. Embracing its rich cultural heritage, Tucson boasts a thriving arts scene featuring captivating museums, art galleries, and the renowned Tucson Gem and Mineral Show. While the cost of living in Tucson exceeds the national average by 4%, there are affordable Tucson suburbs, ensuring a balance between cost-effectiveness and access to the city’s attractions.
#2: Mesa, AZ
Median home price: $440,000 Mesa, AZ homes for sale
As the third-largest city in Arizona, Mesa is known for its suburban neighborhoods, well-maintained parks, and outdoor activities. Moving to Mesa, you’ll enjoy over 300 days of sunshine each year, making it ideal for outdoor enthusiasts. Explore the nearby Superstition Mountains, go hiking or biking in Usery Mountain Regional Park, or enjoy water sports at the nearby Saguaro Lake. Mesa also offers a rich cultural scene, with attractions such as the Mesa Arts Center, which hosts a variety of performances, exhibits, and festivals throughout the year.
#3: Phoenix, AZ
Median home price: $439,950 Phoenix, AZ homes for sale
Known as the Valley of the Sun, Phoenix is a bustling metropolis with a thriving economy, vibrant culture, and many amenities. With a move to Phoenix, residents can enjoy an abundance of sunshine throughout the year, allowing for a wide range of outdoor activities such as hiking, golfing, and exploring the scenic desert landscapes. Phoenix is home to major sports teams, including the Phoenix Suns and the Arizona Diamondbacks, offering exciting opportunities for sports enthusiasts. Additionally, if you’re looking for affordable Phoenix suburbs, several options provide a more budget-friendly housing market while offering access to the city’s amenities.
#4: Flagstaff, AZ
Median home price: $645,000 Flagstaff, AZ homes for sale
Flagstaff enjoys all four seasons, attracting residents who revel in the mesmerizing hues of autumn, the snowy winters that offer thrilling skiing and snowboarding opportunities at Arizona Snowbowl, and the mild summers perfect for hiking and camping. If you’re a lover of stars, moving to Flagstaff will grant you the chance to experience the Lowell Observatory, where residents can delve into the wonders of the night sky. It’s worth noting that the cost of living in Flagstaff is 14% higher than the National Average. Still, the city’s unique offerings and natural beauty make it a worthwhile investment for those seeking an exceptional living experience.
#5: Scottsdale, AZ
Median home price: $830,000 Scottsdale, AZ homes for sale
Scottsdale is renowned for its world-class resorts, spas, and golf courses, attracting visitors and residents seeking relaxation and indulgence. Scottsdale’s Old Town showcases a charming blend of historic charm and modern sophistication with its trendy boutiques, art galleries, and renowned dining establishments. Moving to Scottsdale can be expensive, with the cost of living exceeding the national average by 13%. If you want to stay on a budget, there are affordable suburbs outside downtown.
The homebuying process in Arizona
If the allure of Arizona has swept you away, and you have your heart set on a specific city or neighborhood, it’s time to dive into the homebuying process.
1. Prioritize your finances
Getting your finances in order is crucial when buying a house in Arizona. You can position yourself for a smooth and successful homebuying journey with careful financial planning and preparation. Start by assessing your credit score and addressing any issues to ensure you qualify for favorable loan terms. Next, determine your budget and calculate how much you can comfortably afford, considering factors like down payment, closing costs, and monthly mortgage payments. Using tools like an affordability calculator can help you determine your budget.
Various programs are available for first-time homebuyers in Arizona, including the Pathway to Purchase, which can assist with up to $20,000 in down payment and closing cost assistance.
2. Get pre-approved from a lender
Securing a pre-approval when buying a home in Arizona can provide numerous advantages. By obtaining pre-approval from a reputable lender, you clearly understand your financial standing and borrowing capacity. This knowledge empowers you to set a realistic budget, ensuring you focus on homes within your price range. Pre-approval also enhances your credibility as a buyer, demonstrating to sellers that you are serious and financially qualified.
3. Connect with a local agent in Arizona
Working with a local agent during the homebuying process in Arizona is of utmost importance. Local agents possess invaluable knowledge and expertise specific to the Arizona real estate market, which can significantly benefit buyers. They are well-versed in the intricacies of different neighborhoods, market trends, and pricing dynamics across the state. So whether you need a real estate agent in Tucson or an agent in Phoenix, they’re here to help.
4. Start touring homes
When touring homes in Arizona, keep a discerning eye and consider key factors that can influence your decision. First, pay attention to the home’s location and neighborhood. Consider proximity to schools, amenities, and commute times to ensure it aligns with your lifestyle. Assess the property’s condition, checking for any signs of wear, structural issues, or potential maintenance needs. Look for natural lighting, functional layouts, and ample storage space that meet your requirements.
5. Make the offer
The offer is a critical aspect of the homebuying process in Arizona, carrying significant weight in determining whether your dream home becomes a reality. Crafting a strong offer is essential to stand out in a competitive market. Consider the listing price, property condition, and local market trends to determine a fair and competitive offer. Your offer should include the purchase price, contingencies, and desired timelines for inspections, financing, and closing.
6. Close on the house
The closing process is a pivotal moment in the homebuying process in Arizona, where all the necessary paperwork is finalized, and ownership of the property is transferred. It’s a critical step that requires careful attention to detail and a thorough review of the closing documents. During the closing, you will sign various legal documents, including the mortgage, deed, and other necessary paperwork. It’s essential to carefully review and understand these documents before signing to ensure you know the terms and obligations.
If you’re new to the process and still have questions, Redfin is here to help. The First-Time Homebuyer Guide goes into more detail about each step in the homebuying process.
Factors to consider when buying a house in Arizona
Due to Arizona’s geographical location, there are distinct factors to consider when buying a home.
Climate and weather
When buying a house in Arizona, it is crucial to consider the climate and weather, as well as the impact climate change is having in the state. Arizona offers a diverse range of climates, with hot summers exceeding 100 degrees Fahrenheit (38 degrees Celsius) in desert areas like Phoenix and Tucson. These cities are also known for their mild and pleasant winters, attracting snowbirds and retired individuals seeking warmer temperatures. On the other hand, the northern parts of the state, including Flagstaff and Sedona, provide a cooler and more moderate climate, with snowy winters and comfortable summers. Homebuyers must take into account their preferences and tolerance for extreme heat or cold when selecting a location within Arizona.
Additionally, the state’s unique desert climate presents both advantages and challenges. Efficient cooling systems and proper insulation are necessary to combat the intense summer heat, while the dry weather increases the risk of drought and wildfires, prompting homeowners to consider shade availability, outdoor living spaces, and landscaping options to mitigate the sun’s impact.
Dual agency
Arizona allows for dual agency in real estate transactions, which refers to a real estate agent representing both the buyer and the seller in the same transaction. In dual agency, the agent acts as a neutral intermediary, facilitating the transaction and ensuring a fair process for both parties. However, it’s important to note that dual agency requires all parties’ informed consent.
Buying a house in Arizona: Bottom line
Navigating the homebuying process in Arizona requires careful consideration and strategic decision-making. From understanding the importance of location to getting finances in order, securing pre-approval, and working with local agents, each step plays a vital role in achieving a successful and satisfying home purchase. By being well-informed, proactive, and adaptable, homebuyers can confidently navigate the Arizona real estate landscape and find their perfect place to call home in this beautiful southwestern state.
Buying a house in Arizona FAQ
What are the requirements for buying a home in Arizona?
To start it off, a down payment is necessary, although the specific amount can vary depending on factors such as the loan type and lender requirements. A good credit score is also crucial, with a minimum score of around 620 often preferred for conventional loans. Income and employment verification is required to demonstrate the ability to repay the mortgage. Lenders assess the debt-to-income ratio to ensure borrowers can manage their monthly payments. It is advisable to conduct a property appraisal and home inspection to determine the value and condition of the property.
What is a typical down payment on a house in Arizona?
A typical down payment on a house in Arizona can vary depending on various factors. Generally, it ranges from 3% to 20% of the purchase price. The percentage often depends on the loan type, lender requirements, and the borrower’s financial situation. For conventional loans, a down payment of around 20% is ideal for avoiding private mortgage insurance (PMI). However, options are available for lower down payment percentages, such as 3% or 5%, particularly for first-time homebuyers or through government-backed loan programs like FHA loans.
What credit score do I need to buy a house in Arizona?
When buying a house in Arizona, the credit score requirement can vary depending on the type of loan and the lender’s criteria. Generally, a good credit score is preferred to qualify for favorable mortgage terms. A minimum credit score of around 620 or higher is typically required for conventional loans. However, loan programs, such as FHA loans, offer more flexibility and can accommodate borrowers with lower credit scores, sometimes as low as 580. It’s important to note that a higher credit score generally improves your chances of securing a mortgage with competitive interest rates and favorable terms.
High above the Las Vegas Strip, solar panels blanketed the roof of Mandalay Bay Convention Center — 26,000 of them, rippling across an area larger than 20 football fields.
From this vantage point, the sun-dappled Mandalay Bay and Delano hotels dominated the horizon, emerging like comically large golden scepters from the glittering black panels.Snow-tipped mountains rose to the west.
It was a cold winter morning in the Mojave Desert. But there was plenty of sunlight to supply the solar array.
“This is really an ideal location,” said Michael Gulich, vice president of sustainability at MGM Resorts International.
The same goes for the rest of Las Vegas and its sprawling suburbs.
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Sin City already has more solar panels per person than any major U.S. metropolis outside Hawaii, according to one analysis. And the city is bursting with single-family homes, warehouses and parking lots untouched by solar.
L.A. Times energy reporter Sammy Roth heads to the Las Vegas Valley, where giant solar fields are beginning to carpet the desert. But what is the environmental cost? (Video by Jessica Q. Chen, Maggie Beidelman / Los Angeles Times)
There’s enormous opportunity to lower household utility bills and cut climate pollution — without damaging wildlife habitat or disrupting treasured landscapes.
But that hasn’t stopped corporations from making plans to carpet the desert surrounding Las Vegas with dozens of giant solar fields — some of them designed to supply power to California. The Biden administration has fueled that growth, taking steps to encourage solar and wind energy development across vast stretches of public lands in Nevada and other Western states.
Those energy generators could imperil rare plants and slow-footed tortoises already threatened by rising temperatures.
They could also lessen the death and suffering from the worsening heat waves, fires, droughts and storms of the climate crisis.
Researchers have found there’s not nearly enough space on rooftops to supply all U.S. electricity — especially as more people drive electric cars. Even an analysis funded by rooftop solar advocates and installers found that the most cost-effective route to phasing out fossil fuels involves six times more power from big solar and wind farms than from smaller local solar systems.
But the exact balance has yet to be determined. And Nevada is ground zero for figuring it out.
The outcome could be determined, in part, by billionaire investor Warren Buffett.
The so-called Oracle of Omaha owns NV Energy, the monopoly utility that supplies electricity to most Nevadans. NV Energy and its investor-owned utility brethren across the country can earn huge amounts of money paving over public lands with solar and wind farms and building long-distance transmission lines to cities.
But by regulatory design, those companies don’t profit off rooftop solar. And in many cases, they’ve fought to limit rooftop solar — which can reduce the need for large-scale infrastructure and result in lower returns for investors.
Mike Troncoso remembers the exact date of Nevada’s rooftop solar reckoning.
It was Dec. 23, 2015, and he was working for SolarCity. The rooftop installer abruptly ceased operations in the Silver State after NV Energy helped persuade officials to slash a program that pays solar customers for energy they send to the power grid.
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“I was out in the field working, and we got a call: ‘Stop everything you’re doing, don’t finish the project, come to the warehouse,’” Troncoso said. “It was right before Christmas, and they said, ‘Hey, guys, unfortunately we’re getting shut down.’”
After a public outcry, Nevada lawmakers partly reversed the reductions to rooftop solar incentives. Since then, NV Energy and the rooftop solar industry have maintained an uneasy political ceasefire. Installations now exceed pre-2015 levels.
Today, Troncoso is Nevada branch manager for Sunrun, the nation’s largest rooftop solar installer. The company has enough work in the state to support a dozen crews, each named for a different casino. On a chilly winter morning before sunrise, they prepared for the day ahead — laying out steel rails, hooking up microinverters and loading panels onto powder-blue trucks.
But even if Sunrun’s business continues to grow, it won’t eliminate the need for large solar farms in the desert.
Some habitat destruction is unavoidable — at least if we want to break our fossil fuel addiction. The key questions are: How many big solar farms are needed, and where should they be built? Can they be engineered to coexist with animals and plants?
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And if not, should Americans be willing to sacrifice a few endangered species in the name of tackling climate change?
To answer those questions, Los Angeles Times journalists spent a week in southern Nevada, touring solar construction sites, hiking up sand dunes and off-roading through the Mojave. We spoke with NV Energy executives, conservation activists battling Buffett’s company and desert rats who don’t want to see their favorite off-highway vehicle trails cut off by solar farms.
Odds are, no one will get everything they want.
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The tortoise in the coal mine
Biologist Bre Moyle easily spotted the small yellow flag affixed to a scraggly creosote bush — one of many hardy plants sprouting from the caliche soil, surrounded by rows of gleaming steel trusses that would soon hoist solar panels toward the sky.
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Moyle leaned down for a closer look, gently pulling aside branches to reveal a football-sized hole in the ground. It was the entrance to a desert tortoise burrow — one of thousands catalogued by her employer, Primergy Solar, during construction of one of the nation’s largest solar farms on public lands outside Las Vegas.
“I wouldn’t stand on this side of it,” Moyle advised us. “If you walk back there, you could collapse it, potentially.”
I’d seen plenty of solar construction sites in my decade reporting on energy. But none like this.
Instead of tearing out every cactus and other plant and leveling the land flat — the “blade and grade” method — Primergy had left much of the native vegetation in place and installed trusses of different heights to match the ground’s natural contours. The company had temporarily relocated more than 1,600 plants to an on-site nursery, with plans to put them back later.
The Oakland-based developer also went to great lengths to safeguard desert tortoises — an iconic reptile protected under the federal Endangered Species Act, and the biggest environmental roadblock to building solar in the Mojave.
Desert tortoises are sensitive to global warming, residential sprawl and other human encroachment on their habitat. The U.S. Fish and Wildlife Service has estimated tortoise populations fell by more than one-third between 2004 and 2014.
Scientists consider much of the Primergy site high-quality tortoise habitat. It also straddles a connectivity corridor that could help the reptiles seek safer haven as hotter weather and more extreme droughts make their current homes increasingly unlivable.
Before Primergy started building, the company scoured the site and removed 167 tortoises, with plans to let them return and live among the solar panels once the heavy lifting is over. Two-thirds of the project site will be repopulated with tortoises.
Workers removed more tortoises during construction. As of January, the company knew of just two tortoises killed — one that may have been hit by a car, and another that may have been entombed in its burrow by roadwork, then eaten by a kit fox.
Primergy Vice President Thomas Regenhard acknowledged the company can’t build solar here without doing any harm to the ecosystem — or spurring opposition from conservation activists. But as he watched union construction workers lift panels onto trusses, he said Primergy is “making the best of the worst-case situation” for solar opponents.
“What we’re trying to do is make it the least impactful on the environment and natural resources,” he said. “What we’re also doing is we’re sharing that knowledge, so that these projects can be built in a better way moving forward.”
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The company isn’t saving tortoises out of the goodness of its profit-seeking heart.
The U.S. Bureau of Land Management conditioned its approval of the solar farm, called Gemini, on a long list of environmental protection measures — and only after some bureau staffers seemingly contemplated rejecting the project entirely.
Documents obtained under the Freedom of Information Act by the conservation group Defenders of Wildlife show the bureau’s Las Vegas field office drafted several versions of a “record of decision” that would have denied the permit application for Gemini. The drafts listed several objections, including harm to desert tortoises, loss of space for off-road vehicle drivers and disturbance of the Old Spanish National Historic Trail, which runs through the project site.
Separately, Primergy reached a legal settlement with conservationists — who challenged the project’s federal approval in court — in which the company agreed to additional steps to protect tortoises and a plant known as the three-corner milkvetch.
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The company estimates just 2.5% of the project site will be permanently disturbed — far less than the 33% allowed by Primergy’s federal permit. Regenhard is hopeful the lessons learned here will inform future solar development on public lands.
“This is something new. So we’re refining a lot of the processes,” he said. “We’re not perfect. We’re still learning.”
By the time construction wraps this fall, 1.8 million panels will cover nearly 4,000 football fields’ worth of land, just off the 15 Freeway. They’ll be able to produce 690 megawatts of power — as much as 115,000 typical home solar systems. And they’ll be paired with batteries, to store energy and help NV Energy customers keep running their air conditioners after sundown.
Unlike many solar fields, Gemini is close to the population it will serve — just a few dozen miles from the Strip. And the affected landscape is far from visually stunning, with none of the red-rock majesty found at nearby Valley of Fire State Park.
But desert tortoises don’t care if a place looks cool to humans. They care if it’s good tortoise habitat.
Moyle, Primergy’s environmental services manager, pointed to a small black structure at the bottom of a fence along the site’s edge — a shade shelter for tortoises. Workers installed them every 800 feet, so that if any relocated reptiles try to return to the solar farm too early, they don’t die pacing along the fence in the heat.
“They have a really, really good sense of direction,” Moyle said. “They know where their homes are. They want to come back.”
Primergy will study what happens when tortoises do come back. Will they benefit from the shade of the solar panels? Or will they struggle to survive on the industrialized landscape?
And looming over those uncertainties, a more existential query: With global warming beginning to devastate human and animal life around the world, should we really be slowing or stopping solar development to save a single type of reptile?
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Moyle was ready with an answer: Tortoises are a keystone species. If they’re doing well, it’s a good sign of a healthy ecosystem in which other desert creatures — such as burrowing owls, kit foxes and American badgers — are positioned to thrive, too.
And as the COVID-19 pandemic has demonstrated, human survival is inextricably linked with a healthy natural world.
“We take one thing out, we don’t know what sort of disastrous effect it’s going to have on everything else,” Moyle said.
We do, however, know the consequences of relying on fossil fuels: entire towns burning to the ground, Lake Mead three-quarters empty, elderly Americans baking to death in their overheated homes. With worse to come.
The shifting sands of time
A few miles south, another solar project was rising in the desert. This one looked different.
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A fleet of bulldozers, scrapers, excavators and graders was nearly done flattening the land — a beige moonscape devoid of cacti and creosote. The solar panel support trusses were all the same height, forming an eerily rigid silver sea.
When I asked Carl Glass — construction manager for DEPCOM Power, the contractor building this project for Buffett’s NV Energy — why workers couldn’t leave vegetation in place like at Gemini, he offered a simple answer: drainage. Allowing the land to retain its natural contours, he said, would make it difficult to move stormwater off the site during summer monsoons.
Safety was another consideration, said Dani Strain, NV Energy’s senior manager for the project. Blading and grading the land meant workers wouldn’t have to carry solar panels and equipment across ground studded with tripping hazards.
“It’s nicer for the environment not to do it,” Strain said. “But it creates other problems. You can’t have everything.”
This kind of solar project has typified development in the Mojave Desert.
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And it helps explain why the Center for Biological Diversity’s Patrick Donnelly has fought so hard to limit that development.
The morning after touring the solar construction sites, we joined Donnelly for a hike up Big Dune, a giant pile of sand covering five square miles and towering 500 feet above the desert floor, 90 miles northwest of Las Vegas. The sun was just beginning its ascent over the Mojave, bathing the sand in a smooth umber glow beneath pockets of wispy cloud.
On weekends, Donnelly said, the dune can be overrun by thousands of off-road vehicles. But on this day, it was quiet.
Energy companies have proposed more than a dozen solar farms on public lands surrounding Big Dune — some with overlapping footprints. Donnelly doesn’t oppose all of them. But he thinks federal agencies should limit solar to the least ecologically sensitive parts of Nevada, instead of letting companies pitch projects almost anywhere they choose.
“Developers are looking at this as low-hanging fruit,” he said. “The idea is, this is where California can build all of its solar.”
We trekked slowly up the dune, our bodies casting long shadows in the early morning light. When we took a breather and looked back down, a trail of footprints marked our path. Donnelly assured us a windy day would wipe them away.
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“This is why I live here, man,” he said. “It’s the most beautiful place on Earth, in my mind.”
Donnelly broke his back in a rock-climbing accident, so he used a walking stick to scale the dune. He lives not far from here, at the edge of Death Valley National Park, and works as the nonprofit Center for Biological Diversity’s Great Basin director.
As we resumed our journey, the wind blowing hard, I asked Donnelly to rank the top human threats to the Mojave. He was quick to answer: The climate crisis was No. 1, followed by housing sprawl, solar development and off-road vehicles.
“There’s no good solar project in the desert. But there’s less bad,” he said. “And we’re at a point now where we have to settle for less bad, because the alternatives are more bad: more coal, more gas, climate apocalypse.”
That hasn’t stopped Donnelly and his colleagues from fighting renewable energy projects they fear would wipe out entire species — even little-known plants and animals with tiny ranges, such as Tiehm’s buckwheat and the Dixie Valley toad.
“I’m not a religious guy,” Donnelly said. “But all God’s creatures great and small.”
After a steep stretch of sand, we stopped along a ridge with sweeping views. To our west were the Funeral Mountains, across the California state line in Death Valley National Park — and far beyond them Mt. Whitney, its snow-covered facade just barely visible. To our east was Highway 95, cutting across the Amargosa Valley en route from Las Vegas to Reno.
It’s along this highway that so many developers want to build.
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“We would be in a sea of solar right now,” Donnelly said.
Having heard plenty of rural residents say they don’t want to look at such a sea, I asked Donnelly if this was a bad spot for solar because it would ruin the glorious views. He told me he never makes that argument, “because honestly, views aren’t really the primary concern at this moment. The primary concern is stopping the biodiversity crisis and the climate crisis.”
“There are certain places where we shouldn’t put solar because it’s a wild and undisturbed landscape,” he said.
As far as he’s concerned, though, the Amargosa Valley isn’t one of those landscapes, what with Highway 95 running through it. The same goes for Dry Lake Valley, where NV Energy’s solar construction site is already surrounded by energy infrastructure.
What Donnelly would like to see is better planning.
He pointed to California, where state and federal officials spent eight years crafting a desert conservation plan that allows solar and wind farms across a few hundred thousand acres while setting aside millions more for protection. He thinks a similar process is crucial in Nevada, where four-fifths of the land area is owned by the federal government — more than any other state.
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If Donnelly had his way, regulators would put the kibosh on solar farms immediately adjacent to Big Dune. He’s worried they could alter the movement of sand across the desert floor, affecting several rare beetles that call the dune home.
But if the feds want to allow solar projects along the highway to the south, near the Area 51 Alien Center?
“Might not be the end the world,” Donnelly said.
He shot me a grin.
“You know, one thing I like to do …”
Without warning, he took off racing down the dune, carried by momentum and love for the desert. He laughed as he reached a natural stopping point, calling for us to join him. His voice sounded free and full of possibility.
Some solar panels on the horizon wouldn’t have changed that.
Shout it from the rooftops
Laura Cunningham and Kevin Emmerich were a match made in Mojave Desert heaven.
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Cunningham was a wildlife biologist, Emmerich a park ranger when they met nearly 30 years ago at Death Valley. She studied tortoises for government agencies and later a private contractor. He worked with bighorn sheep and gave interpretive talks. They got married, bought property along the Amargosa River and started their own conservation group, Basin and Range Watch.
And they’ve been fighting solar development ever since.
That’s how we ended up in the back of their SUV, pulling open a rickety cattle gate off Highway 95 and driving past wild burros on a dirt road through Nevada’s Bullfrog Hills, 100 miles northwest of Las Vegas.
They had told us Sarcobatus Flat was stunning, but I was still surprised by how stunning. I got my first look as we crested a ridge. The gently sloping valley spilled down toward Death Valley National Park, whose snowy mountain peaks towered over a landscape dotted with thousands of Joshua trees.
“Everything we’re looking at is proposed for solar development,” Cunningham said.
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Most environmentalists agree we need at least some large solar farms. Cunningham and Emmerich are different. They’re at the vanguard of a harder-core desert protection movement that sees all large-scale solar farms on public lands as bad news.
Why had so many companies converged on Sarcobatus Flat?
The main answer is transmission. NV Energy is seeking federal approval to build the 358-mile Greenlink West electric line, which would carry thousands of megawatts of renewable power between Reno and Las Vegas along the Highway 95 corridor.
The dirt road curved around a small hill, and suddenly we found ourselves on the valley floor, surrounded by Joshua trees. Some looked healthy; others had bark that had been chewed by rodents seeking water, a sign of drought stress. Scientists estimate the Joshua tree’s western subspecies could lose 90% of its range as the world gets hotter and droughts get more intense.
But asked whether climate change or solar posed a bigger threat to Sarcobatus Flat, Cunningham didn’t hesitate.
“Oh, solar development hands down,” she said.
Nearly 20 years ago, she said, she helped relocate desert tortoises to make way for a test track in California. One of them tried to return home, walking 20 miles before hitting a fence. It paced back and forth and eventually died of heat exhaustion.
Solar farms, she said, pose a similar threat to tortoises. And at Sarcobatus Flat, they would cover a high-elevation area that could otherwise serve as a climate refuge for Joshua trees, giving them a relatively cool place to reproduce as the planet heats up.
“It makes no sense to me that we’re going to bulldoze them down and throw them into trash piles. It’s just crazy,” she said.
In Cunningham and Emmerich’s view, every sun-baked parking lot in L.A. and Vegas and Phoenix should have a solar canopy, every warehouse and single-family home a solar roof. It’s a common argument among desert defenders: Why sacrifice sensitive ecosystems when there’s an easy alternative for fighting climate change? Especially when rooftop solar can reduce strain on an overtaxed electric grid and — when paired with batteries — help people keep their lights on during blackouts?
The answer isn’t especially satisfying to conservationists.
For all the virtues of rooftop solar, it’s an expensive way to generate clean power — and keeping energy costs low is crucial to ensure that lower-income families can afford electric cars, another key climate solution. A recent report from investment bank Lazard pegged the cost of rooftop solar at 11.7 cents per kilowatt-hour on the low end, compared with 2.4 cents for utility solar.
Even when factoring in pricey long-distance electric lines, utility-scale solar is typically cheaper, several experts told me.
“It’s three to six times more expensive to put solar on your roof than to put it in a large-scale project,” said Jesse Jenkins, an energy systems researcher at Princeton University. “There may be some added value to having solar in the Los Angeles Basin instead of the middle of the Mojave Desert. But is it 300% to 600% more value? Probably not. It’s probably not even close.”
There’s a practical challenge, too.
The National Renewable Energy Laboratory has estimated U.S. rooftops could generate 1,432 terawatt-hours of electricity per year — just 13% of the power America will need to replace most of its coal, oil and gas, according to research led by Jenkins.
Add in parking lots and other areas within cities, and urban solar systems might conceivably supply one-quarter or even one-third of U.S. power, several experts told The Times — in an unlikely scenario where they’re installed in every suitable spot.
Energy researcher Chris Clack’s consulting firm has found that dramatic growth in rooftop and other small-scale solar installations could reduce the costs of slashing climate pollution by half a trillion dollars. But even Clack said rooftops alone won’t cut it.
“Realistically, 80% is going to end up being utility grid no matter what,” he said.
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All those industrial renewable energy projects will have to go somewhere.
Sarcobatus Flat may not be the answer. Federal officials classified all three solar proposals there as “low priority,” citing their proximity to Death Valley and potential harm to tortoise habitat. One developer withdrew its application last year.
Before leaving the area, Cunningham pointed to a wooden marker, one of at least half a dozen stretching out in a line. I walked over to take a closer look and discovered it was a mining claim for lithium — a main ingredient in electric-car batteries.
If solar development didn’t upend this valley, lithium extraction might.
On the beaten track
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The four-wheeler jerked violently as Erica Muxlow pressed her foot to the gas, sending us flying down a rough dirt road with no end in sight but the distant mountains. Five-point safety straps were the only things stopping us from flying out of our seats, the vehicle leaping through the air as we reached speeds of 40 mph, then 50 mph, the wind whipping our faces.
It was like riding Disneyland’s Matterhorn Bobsleds — just without the Yeti.
Ahead of us, Muxlow’s neighbor Jimmy Lewis led the way on an electric blue motorcycle, kicking up a stream of sand. He wanted us to see thousands of acres of public lands outside his adopted hometown of Pahrump, in Nevada’s Nye County, that could soon be blocked by solar projects — cutting off access to off-highway vehicle enthusiasts such as himself.
“You could build an apartment complex or a shopping mall here, and it would be the same thing to me,” he said.
To progressive-minded Angelenos or San Franciscans, preserving large chunks of public land for gas-guzzling, environmentally destructive dirt bikes might sound like a terrible reason not to build solar farms that would lessen the climate crisis.
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But here’s the reality: Rural Westerners such as Lewis will play a key role in determining how much clean energy gets built.
Not long before our Nevada trip, Nye County placed a six-month pause on new renewable energy projects, citing local concerns about loss of off-road vehicle trails. Similar fears have stymied development across the U.S., with rural residents attacking solar and wind farms as industrial intrusions on their way of life — and local governments throwing up roadblocks.
For Lewis, the conflict is deeply personal.
He moved here from Southern California more than a decade ago, trading life by the beach for a five-acre plot where he runs an off-roading school and test-drives motorcycles for manufacturers. His warehouse was packed with dozens of dirt bikes.
“This is my life. Motorcycles, motorcycles, motorcycles,” he said, laughing.
Lewis has worked to stir up opposition to three local solar farm proposals. So far, his efforts have been in vain.
One project is already under construction. Peering through a fence, we saw row after row of trusses, waiting for their photovoltaic panels. It’s called Yellow Pine, and it’s being built by Florida-based NextEra Energy to supply power to California.
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Lewis learned about Yellow Pine when he was riding one of his favorite trails and was surprised to find it cut off. He compared the experience to riding the best roller-coaster at a theme park, only to have it grind to a halt three-quarters of the way through.
“I don’t want my playground taken away from me,” he said.
“Me neither!” a voice called out from behind us.
We turned and were greeted by Shannon Salter, an activist who had previously spent nine months camping near the Yellow Pine site to protest the habitat destruction. She and Lewis had never met, but they quickly realized they had common cause.
“It’s the opposite of green!” Salter said.
“On my roof, not my backyard,” Lewis agreed.
Never mind that conservationists have long decried the ecological damage from desert off-roading. Salter and Lewis both cared about these lands. Neither wanted to see the solar industry lay claim to them. They talked about staying in touch.
It’s easy to imagine similar alliances forming across the West, the clean energy transition bringing together environmentalists and rural residents in a battle to defend their lifestyles, their landscapes and animals that can’t fight for themselves.
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It’s also easy to imagine major cities that badly need lots of solar and wind power — Los Angeles, Las Vegas, Phoenix — brushing off those complaints as insignificant compared with the climate emergency, or as fueled by right-wing misinformation.
But many of concerns raised by critics are legitimate. And their voices are only getting louder.
As night fell over the Mojave, Lewis shared his idea that any city buying electricity from a desert solar farm should be required to install a certain amount of rooftop solar back home first — on government buildings, at least. It only seemed fair.
“Some people see the desert as just a wasteland,” Lewis said. “I think it’s beautiful.”
The view from Black Mountain
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So how do we build enough renewable energy to replace fossil fuels without destroying too many ecosystems, or stoking too much political opposition from rural towns, or moving too slowly to save the planet?
Few people could do more to ease those tensions than Buffett.
Our conversation kept returning to the legendary investor as we hiked Black Mountain, just outside Vegas, on our last morning in the Silver State. We were joined by Jaina Moan, director of external affairs for the Nature Conservancy’s Nevada chapter. She had promised a view of massive solar fields from the peak — but only after a 3.5-mile trek with 2,000 feet of elevation gain.
“It’ll be a little StairMaster at the end,” she warned us.
The homes and hotels and casinos of the Las Vegas Valley retreated behind us as we climbed, looking ever smaller and more insignificant against the vast open desert. It was an illusion that will prove increasingly difficult to maintain as Sin City and its suburbs continue their march into the Mojave. Nevada politicians from both parties are pushing for legislation that would let federal officials auction off additional public lands for residential and commercial development.
Vegas and other Western cities could limit the need for more suburbs — and sprawling solar farms — by growing smarter, Moan said. Urban areas could embrace density, to help people drive fewer miles and reduce the demand for new power supplies to fuel electric vehicles. They could invest in electric buses and trains — and use less water, which would save a lot of energy.
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“As our spaces become more crowded, we’re going to have to come up with more creative ideas,” Moan said.
That’s where Buffett could make things easier.
The billionaire’s Berkshire Hathaway company owns electric utilities that serve millions of people, from California to Nevada to Illinois. Those utilities, Moan said, could buck the industry trend of urging policymakers to reduce financial incentives for rooftop solar and instead encourage the technology — along with other small-scale clean energy solutions, such as local microgrids.
That would limit the need for big solar farms — at least somewhat.
Berkshire and other energy giants could also build solar on lands already altered by humans, such as abandoned mines, toxic Superfund sites, reservoirs, landfills, agricultural areas, highway corridors and canals that carry water to farms and cities.
The costs are typically higher than building on undisturbed public lands. And in many cases there are technical challenges yet to be resolved. But those kinds of “creative solutions” could at least lessen the loss of biodiversity, Moan said.
“There’s money to be made there, and there’s good to be done,” she said.
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It’s hard to know what Buffett thinks. A Berkshire spokesperson declined my request to interview him.
Tony Sanchez, NV Energy’s executive vice president for business development and external relations, was more forthcoming.
“The problem for us with rooftop solar,” he said, is that it’s “not controlled at all by us.” As a result, NV Energy can’t decide when and how rooftop solar power is used — and can’t rely on that power to help balance supply and demand on the grid.
Over time, Sanchez predicted, a lot more rooftop solar will get built. But he couldn’t say how much.
Rooftop solar faces a similarly uncertain future in California, where state officials voted last year to slash incentive payments, calling them an unfair subsidy. Industry leaders have warned of a dramatic decline in installations.
As we neared the top of Black Mountain, the solar farms on the other side came into view. They stretched across the Eldorado Valley far below — black rectangles that could help save life on Earth while also destroying bits and pieces of it.
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Moan believes the key to balancing clean energy and conservation is “go slow to go fast.” Government agencies, she said, should work with conservation activists, small-town residents and Native American tribes to study and map out the best places for clean energy, then reward companies that agree to build in those areas with faster approvals. Solar and wind development would slow down in the short term but speed up in the long run, with quicker environmental reviews and less risk of lawsuits.
It’s a tantalizing concept — but I confessed to Moan that I worried it would backfire.
What if the sparring factions couldn’t agree on the best spots to build solar and wind farms, and instead wasted years arguing? Or what if they did manage to hammer out some compromises, only for a handful of unhappy people or groups to take them to court, gumming up the works? Couldn’t “go slow to go fast” end up becoming “go slow to go slow”?
In other words, should we really bet our collective future on human beings working together, rather than fighting?
Moan was sympathetic to my fears. She also didn’t see another way forward.
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“We really need to think holistically about saving everything,” she said.
The sad truth is, not everything can be saved. Not if we want to keep the world livable for people and animals alike.
Some beloved landscapes will be left unrecognizable. Some families will be stuck paying high energy bills to monopoly utilities, even as some utility investors make less money. Some tortoises will probably die, pacing along fences in the heat.
The alternative is worse.
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Today is all about the Federal Reserve. Their two-day FOMC meeting wraps up today and we could see mortgage rates adjust when they release their written statement at 2:00pm. It’s important for anyone thinking about buying a home or refinancing their current mortgage to tune in and see what happens. Read on for more details.
[embedded content]
Market Outlook 3.19.18 from Total Mortgage on Vimeo.
Where are mortgage rates going?
All eyes on the Fed – rates could adjust this afternoon
The Federal Reserve is front and center today for financial market participants as it’s the final day of their Federal Open Market Committee meeting. The meeting will formally conclude this afternoon at 2:00pm with the release of a written statement outlining their current monetary policy outlook.
It has been widely anticipated for a couple months now by investors and analysts alike that the Fed will decide to raise the nation’s benchmark interest rate–the federal funds rate–by a quarter point, bringing the target range up to 1.50%-1.75%.
Since the markets have already priced this decision in, we won’t see an immediate jump higher for rates once it’s finally written in stone. However, that is not the only thing that investors will be looking for at today’s meeting.
What everyone really wants to learn from this meeting is how the Fed feels about more rate hikes in 2018. Over the past few months we’ve gotten a variety of pundits debating whether or not the Fed will take a more aggressive or cautious approach throughout the year.
For a while there in February when the inflation reports were really coming out strong it seemed as though there might actually be a case for four rate hikes. Now, with recent inflation readings coming in on the softer side it’s not looking like that will happen.
You never know what the Fed will say, though, which is why everyone and their mother will be tuned in at 2:00pm to get the details. Today’s event is also notable because it’s the first time we will get a post-meeting press conference from the new Fed Chair, Jerome Powell.
He will speak for about an hour starting around 2:30pm, fielding questions from journalists. The written statement is of course a huge insight into the inner-workings of the Fed but more often than not we learn more about the situation and rationale behind the decisions from the post-meeting dialogue.
Investors are getting anxious today as they anticipate the Fed’s rate increase, moving more into stocks and out of bonds. The yield on the 10-year Treasury note (which is the best market indicator of where mortgage rates are going) has moved up to its highest position in a month at 2.90%.
Mortgage rates typically move in the same direction as the 10-year yield, and are similarly seeing some upward pressure today.
Rate/Float Recommendation
Lock now before rates increase further
Despite all of the fuss in the markets today, our outlook remains the same: mortgage rates should steadily rise in 2018, so most borrowers will likely get the better deal on a purchase or refinance by locking in a rate sooner rather than later.
Learn what you can do to get the best interest rate possible.
Today’s economic data:
Existing Home Sales
Existing home sales ticked up to an annualized rate of 5.540 million.
EIA Petroleum Status Report
FOMC Meeting Announcement and Press Conference
See above for details
Notable events this week:
Monday:
Tuesday:
FOMC Meeting Begins
Wednesday:
Existing Home Sales
EIA Petroleum Status Report
FOMC Meeting Announcement and Press Conference
Thursday:
Jobless Claims
FHFA House Price Index
PMI Composite Flash
Friday:
Fedspeak
Durable Goods
New Home Sales
*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.
Mortgage applications fell 4% for the week ending Dec. 10, large part because fewer borrowers are looking to refi their exiting mortgages, according to the Mortgage Bankers Association (MBA) survey published on Wednesday.
The decrease was mainly driven by the refi index falling 6.4% from the previous week on a seasonally adjusted basis. Concurrently, the purchase index increased 0.7% from the week prior.
Compared to a year ago, mortgage applications declined across the board. The overall market composite index dipped 30.9% on a seasonally adjusted basis. Refi apps fell 41.4% year over year, and purchase applications decreased 10.3% in the same period.
“Fewer homeowners have a strong incentive to refinance at current rates,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement.
The trade group estimates that the average contract 30-year fixed-rate mortgage for conforming loans ($548,250 or less) remained unchanged at 3.30%. For jumbo mortgage loans (greater than $548,250), rates decreased to 3.32% from 3.33% the week prior.
The keys to lending in a post-refi boom world
As record refinance volumes disappear, lenders need to get intimately familiar with their database of customers. Being a resource for all real estate financing needs for your customers will become more important in the next few years than ever before.
Presented by: CIVIC Financial
Regarding the purchase market, Kan said mortgage applications increased slightly because a 1.7% rise in conventional applications offset a 1.6% decline in applications for government loans. Would-be homebuyers are finding it hard to compete with FHA and VA loans in a purchase market defined by low inventory. Sellers today are prioritizing cash offers and prospective buyers with conventional mortgage approval, particularly given that the Federal Housing Finance Agency just approved higher loan borrowing limits.
“The strength in conventional purchase activity continues to support higher loan balances, which moved back over $400,000. Housing demand remains strong as the year comes to an end amidst tight inventory and steep home-price growth,” Kan said.
Refinances represented 63.3% of total mortgage applications, down slightly from 63.9% the previous week. VA loans comprised 10.6%, decreasing one basis point. Meanwhile, FHA loans went from 9.9% to 9.6% in the period. The USDA share was at 0.5% of the total.
High mortgage rates forcing sellers to accept lower offers on homes – Zoopla
Research shows 42% agreeing to discounts of 5% or more on asking price – the highest level for five years
Soaring mortgage rates and the cost of living crisis are forcing more sellers to accept lower offers to secure a property sale, according to Zoopla.
The property website latest house price index showed that 42% of sellers were accepting discounts of 5% or more on the asking price of their home in the week ending 18 June – the highest level since 2018 – as buyers are driving a harder bargain.
Meanwhile, 15% of those trying to sell their home were accepting discounts of more than 10% on the initial asking price in the same time period. Buyers are pushing for lower prices because of higher mortgage rates and the cost of living crisis.
The average price of two- and five-year fixed-rate mortgages has hit the highest level for seven months, putting further pressure on borrowers reaching the end of their deals and on the buying power of those looking for a new home.
The latest data from the financial information firm Moneyfacts showed the average two-year fixed residential mortgage rate was 6.26% on Tuesday, up from 6.23% on Monday. The average five-year fixed residential mortgage rate was 5.87%, up from 5.86% on the previous day.
Mortgage rates have continued to climb after the Bank of England increased interest rates by half a point to 5% in June in an attempt to curb inflation.
Zoopla said higher rates would result in a 10-20% hit to buying power – the amount of money a buyer can afford to borrow to purchase a property – compared with when they were at 4%.
Richard Donnell, an executive director at Zoopla, said: “Demand for homes remains but those households looking to move home in 2023 need to be very realistic on pricing and get the view of agents on where to pitch their asking price to secure a sale.”
Buyers can attempt to offset the impact of higher mortgage rates and monthly repayments by either increasing their deposit or agreeing to longer mortgage terms. However, those are not options for all would-be buyers, and the further mortgage rates rise above 5%, the more buyers are squeezed out of the market.
This trend has been borne out in the data so far, with 14% fewer buyers in the market over the last four weeks compared with a year ago, Zoopla’s research showed.
Meanwhile, annual house price growth slowed to 1.2% in June and Zoopla predicted a return to “modest” quarterly house price falls in the second half of 2023.
Average UK house prices are on track to fall by up to 5% by the end of the year, although the drop depends partly on mortgage rates and inflation over the coming months.
A sudden increase in the number of homes for sale would also probably weigh on house price growth, and there are signs that supply is starting to grow at a higher rate. There were 18% more homes listed for sale in the past four weeks compared with the five-year average.
An uptick in supply would boost choice for buyers and give them more room to negotiate, driving larger house price falls.
While there are thousands of mortgage companies nationwide, only a select few land in the top 10.
Today, we’ll examine U.S. Bank Mortgage, which ranked 9th in 2019 for total home loan origination volume.
Being a very large depository institution, they’ve got advantages that other, smaller competitors don’t have.
Namely, lots of liquidity and the ability to keep loans on their books, instead of having to sell them off and rely on short-term financing.
This means they can offer mortgage products that the other guys can’t, and potentially lower mortgage rates too.
Let’s learn more about U.S. Bank’s mortgage division.
U.S. Bank Mortgage Fast Facts
9th largest mortgage lender in 2019 based in Minneapolis, Minnesota
Operates both a retail direct-to-consumer and correspondent lending business
Funded $32 billion in home loans last year
A third of total loan volume took place in California
Nearly half of their volume consisted of jumbo loans
Originate a large share of adjustable-rate mortgages
Available in all 50 states and D.C., branches located in 40 states
How to Apply for a Mortgage with U.S. Bank
You can apply online or by phone via digital mortgage application powered by Blend
A faster pre-qualification or loan estimate is also available if simply shopping around
Can request a call from a loan officer or visit a retail branch if located near you
Once approved you can track loan progress via the U.S. Bank Loan Portal
Those who want to apply for a mortgage with U.S. Bank can do so via their website, without human interaction.
So if you’re the impatient type, or simply know what you’re doing, you can get started straight away.
Their digital mortgage application is powered by Blend, a fintech vendor used by many of the top mortgage companies in the country.
Known as the U.S. Bank Loan Portal, it allows you to link financial accounts and speed through the application process without having to gather paperwork and upload documents.
You can connect payroll, tax, and bank account information securely to ensure your application is accurate and complete.
And once approved, you can track loan progress, get status updates, and send messages to your loan team if you have questions.
Alternatively, you can call them up or request a phone call, or visit a brick-and-mortar branch if you want a more hands-on, personal touch.
If you’ve been referred to someone specific, or want to work with someone in your neck of the woods, they have a loan officer directory as well.
You can filter by both address or by name to find someone you know or an individual who works nearby. Then you can apply for a mortgage directly from their personal website.
It’s also possible to generate a quick pre-qualification via their website if you’re not quite ready to apply, but want to see where you stand.
Or if you’re just shopping around, they offer the ability to generate a loan estimate using limited borrower information (look out for a link to this option on the bottom of the application page).
All in all, U.S. Bank makes it easy to get pricing or apply for a home loan.
What Does U.S. Bank Mortgage Offer?
Home purchase loans, refinance loans, home equity loans/lines
Conventional financing (Fannie/Freddie) and government (FHA, USDA, VA)
Fixed-rate mortgages and ARMs
Jumbo home loans up to $3 million loan amounts
Construction home loans and lot loans
Portfolio loans (non-QM)
Physician mortgages
Available on primary homes, second homes, and 1-to-4-unit investment properties
One thing that separates U.S. Bank Mortgage from other mortgage lenders is its expansive menu of home loan offerings.
You can get a home purchase loan, a refinance loan, both rate and term and cash out, a streamline refinance such as a VA IRRRL, or a home equity loan/line.
As noted, they are a large depository bank, which allows them to offer things their competitors can’t.
Namely, portfolio loans that they keep on their books, with their own set of rules and guidelines that may go above and beyond what others have available.
Sure, you can get a conventional 30-year fixed mortgage from U.S. Bank, like anywhere else. But you can also get a 10/1 ARM, a jumbo loan, a construction loan, or a physician’s mortgage.
Additionally, they’ve got a full menu of adjustable-rate mortgage options, such as a 3/1, 5/1, or 10/1 ARM. It’s unclear if they offer interest-only mortgages at this time.
Those looking to purchase a home can sign up in the U.S. Bank Loan Portal and apply for a mortgage eligibility letter, which is their version of a mortgage pre-approval.
Existing homeowners can take advantage of both home equity lines of credit (HELOCs) and home equity loans if you’re happy with your first mortgage but want to tap equity.
You may also be eligible for a discount on closing costs if you’re an existing U.S. Bank customer or if your company participates in the U.S. Bank Corporate Employee Mortgage Program.
Ultimately, they’ve got you covered no matter what type of financing you need.
U.S. Bank Smart Refinance
U.S. Bank Mortgage also offers a so-called “Smart Refinance,” which is their take on the no closing cost refinance.
It allows you to refinance an existing home loan without incurring the typical closing costs, at least out of pocket.
Interestingly, you can only get a loan term as long as 20 years on the Smart Refinance, which is probably intended to keep your loan payoff on track.
But you can take cash out, so even if your loan balance grows as a result, your payoff should come faster, or at least not be extended.
This can save you interest, though monthly payments will be higher to compensate for the shorter loan term.
And there’s a good chance the mortgage rate will be higher to offset the lack of closing costs, unless those are rolled into the loan.
U.S. Bank Mortgage Rates
One plus is that U.S. Bank openly advertises its mortgage rates right on their website. And they are updated daily as the market changes.
You can see both purchase and refinance rates, along with rates by loan type, such as 30-year fixed or 5/1 ARM, or an FHA loan rate.
I checked them out and their fixed mortgage rates seemed pretty competitive relative to what other lenders are offering.
Their jumbo loans were priced only a little bit higher than their conforming loans, and their government home loans were similarly priced.
Their adjustable-rate mortgage rates were actually pricing higher than their fixed offerings, which is a bit of an oddity, though common at the moment.
Typically, these would be offered at a discount, so if applying with U.S. Bank, a fixed-rate mortgage may be the way to go.
Be sure to pay attention to the loan assumptions – when I checked, many of the loan rates required discount points of 0.862% for the advertised rate.
Additionally, they assumed you were buying or refinancing a single-family, primary residence with 20% down and a FICO score of 740+.
U.S. Bank Mortgage Reviews
U.S. Bank Mortgage has a 4.98 rating out of 5 on Zillow, which is as close to perfection as I’ve seen, especially since it’s based on over 4,000 customer reviews.
That’s a pretty large sample size for such as high rating – many customers indicated that the interest rate and fees were lowered than expected.
The nice thing with the Zillow reviews is you can also see how an individual loan officer performs since most of the reviews show who the customer worked with.
You may want to search for specific loan officers since U.S. Bank is such a large company to ensure you’re matched with one of their best employees.
Their reviews on Trustpilot aren’t nearly as good, though some are for products other than mortgage. Be sure to filter reviews for home loans to get a better idea of what to expect.
They are Better Business Bureau accredited, and have been since 1970. While they have an A+ BBB rating, they’ve only got a 1-star and change rating based on customer reviews.
Again, with a mega bank you’re going to have mixed experiences, which is why comparing individual loan officer reviews is key.
U.S. Bank Mortgage Pros and Cons
The Good Stuff
Available in all 50 states and D.C.
Completely digital loan application with ability to link financial accounts
They advertise their mortgage rates (and provide daily pricing updates)
Discounts for existing U.S. Bank customers
Lots of home loan programs to choose from
Free mortgage calculators to determine affordability
They may service your loan as opposed to selling it off to a different company
The Possible Bad Stuff
No mention of lender fees (may have to pay an origination fee)
May need a high FICO score to get approved
Customer experience may vary since it’s such a large bank
Possibly bureaucratic since you’re dealing with a huge company
Homebuyers didn’t get any relief in mortgage rates this week, leaving them with little choice to either move forward with their purchase plans at elevated rates or stick to the sidelines.
The rate on the 30-year fixed mortgage edged higher to 6.71% from 6.67% the week prior, according to Freddie Mac. Rates have swayed between 6% and 7% since the start of the year, showing little signs of softening this summer.
The high rates have kept many homeowners from listing their homes, driving up prices on what’s left in the market and creating unfavorable conditions for the buyers still on the hunt.
“That move-up buyer is pretty much gone,” Luis Padilla, CEO of Oceanside Realty and Padilla Team in Miami, told Yahoo Finance. “It’s what’s putting the brakes on the market and inventory.”
Rate-trapped homeowners stall inventory growth
The latest data showing homes that went into contract in May underscores the inventory challenges.
Pending home sales, a leading indicator of the housing market’s health, dropped 2.7% in May from the previous month, much more than what was expected. That’s largely because buyers couldn’t find enough homes to make a deal, NAR chief economist Lawrence Yun said, noting that each listing received three offers on average.
The shortages have persisted. There were 459,000 single-family homes on the market for the week ending June 26, according to Altos Research. While up 1.9% from a week prior, that’s 10% fewer homes compared with a year ago.
“Normally by mid June you’d have 10-20% more homes on the market than over the holidays,” Mike Simonsen, CEO of Altos Research, wrote in his blog. “But this year we have fewer.”
The biggest reason for the dearth of properties is reluctance from homeowners, most of whom have a much lower mortgage rate than the prevailing rate.
“That move buyer doesn’t want to give up that 3% mortgage rate,” Padilla said. “They would rather commute 30 minutes to work than pay hundreds more on a monthly mortgage payment.”
Buyers move on to new homes
So what’s a homebuyer to do? Many of them who are still in the market are looking at new builds.
That was one factor that pushed the volume of mortgage applications for purchases up 3% for the week ending June 23, according to the Mortgage Bankers Association (MBA). That’s the third week of increases and the highest level of activity since early May.
“New homes sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market,” MBA Deputy Chief Economist Joel Kan said in a statement. “Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.”
Though new inventory offers a glimmer of hope, very few homes that are available are affordable to entry-level buyers.
Padilla noted that while the share of active listings had increased 19.5% in May in the Miami-Dade area, the average cost of a single-family home was $620,000, up 7.8% from a year prior. Prices for condos increased 6.5% to $415,000.
That tracks with national data this week showing prices have increased for three months in a row, making conditions worse for buyers out there.
“This is good news for homeowners gaining more equity,” Mark Fleming, First American’s chief economist, previously told Yahoo Finance. “But it will pressure affordability for the potential first-time homebuyer.”
Gabriella is a personal finance reporter at Yahoo Finance. Follow her on Twitter @__gabriellacruz.
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