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Apache is functioning normally

July 7, 2023 by Brett Tams

Debit cards can unlock many of the benefits of your checking account.

July 7, 2023

If you’re taking your first steps toward financial independence, it’s the perfect time to get acquainted with the debit card. So let’s dive into what a debit card is, how to use a debit card, and how to get a debit card for yourself.

What is a debit card?

A debit card is a physical form of payment—meaning it’s a card you can actually hold in your hand—typically connected to a checking account. It’s possible to link a debit card to a money market account, a savings account, or another cash account, but linking it to a checking account is the most common. You can use a debit card to pay for things in person and online or to withdraw cash directly from your account via an ATM. Whether you’re making a purchase or withdrawing cash with your debit card, the money is immediately drawn (that is, debited) from your account.

What’s the difference between a debit card and a credit card?

Debit cards and credit cards look similar, but there are some important differences between debit cards and credit cards that you should keep in mind:

Where the money comes from

A debit card pays for transactions with money you already have in an account, while a credit card effectively picks up the tab and sends you a bill later. After buying something with your debit card, your account balance will decrease by the amount you just paid almost immediately. With a credit card, your credit balance is how much you’ll eventually need to pay back to the credit card company, while your available credit is how much you have left to spend before you reach your credit limit. When you purchase something with your credit card, your credit balance will increase by that amount, and your remaining available credit will decrease in tandem.

Spending limits

With a debit card, you can only spend as much as you have in your account. Credit cards, by contrast, are effectively lending you money to spend. Credit card companies don’t want you to spend more than you can eventually pay back, so they cap how much money you can spend. This is known as your credit limit.

Costs and fees

The most common fees associated with a debit card are minimum balance fees (when your balance falls below a required amount) and overdraft fees (when you don’t have enough money in your account to pay for your debit card transactions). Credit cards don’t have those fees, but you can incur other fees if you don’t pay your total monthly credit balance on time each month. That’s because you’ll start accumulating interest on any balances not paid in full by the end of the billing cycle. The longer it takes to pay off your balance, the more you’ll end up owing in interest.

Do money market accounts have debit cards?

Some, but not all, money market accounts offer debit cards. Money market accounts typically earn interest and are Federal Deposit Insurance Corporation (FDIC)-insured, but they can also offer some of the features of a checking account. Money market accounts like the Discover Money Market Account provide customers with debit cards to use for purchases or at ATMs.

How does a debit card work?

Debit cards are versatile. When you know how to use a debit card, you can get the most out of:

ATM withdrawals

Debit cards can be used at ATMs to withdraw cash from your account. Simply insert or tap the card, type in your PIN, and select how much money you want to withdraw. Some banks and ATMs may charge fees if you use your card with an unaffiliated financial institution, so make sure you know which ATMs are free for you to use.

In-person transactions

Similar to a credit card, you can use your debit card in person at a cash register. Depending on your card type, you will either swipe, insert, or tap your debit card and enter your PIN to make your purchase. You’re probably used to seeing debit cards used this way at stores, restaurants, and even in taxis.

Online purchases

Debit cards can also be used for buying things online. However, when you place an order online, you typically need to enter more information since you can’t swipe your card. That information can include your card number, expiration date, security code, billing address, and possibly other verification information.

What are the benefits of a debit card?

There’s a reason that a debit card is a staple in so many people’s wallets. Debit cards come with a number of benefits:

Convenience. It’s a lot easier to use a debit card to buy things and withdraw money than it is to write checks.

Security. Your money is typically protected by FDIC insurance. (Check with your bank.) And many banks will send you a fraud alert if any suspicious activity is detected.

Rewards. In the past, credit cards have been known for having better rewards than debit cards. However, in recent years, some debit cards have stepped up their game, offering cash back in exchange for using the card.

What are typical debit card fees?

You won’t pay interest on the transactions you make with your debit card, but you need to be aware of common debit card fees and how to avoid them:

Overdraft fees. If your bank doesn’t offer overdraft protection, this is a fee to keep an eye on. That’s because if you accidentally spend more money than you have in your linked account, your bank may charge you an overdraft fee.

ATM fees. Using ATMs outside of your bank’s ATM network may result in transaction fees that will be deducted from your linked account.

Maintenance fees. Some banks charge account maintenance fees if your minimum balance falls below a certain amount. According to a 2022 Bankrate study, the average monthly maintenance fee for noninterest-earning checking accounts that charge this fee was $5.44.

While the above fees can dwindle your account balance, they can often be avoided by checking your balance, keeping an eye on your spending, and using the right ATMs.

How to get a debit card

To get a debit card for yourself, follow these steps:

Research financial institutions
There are a lot of banks with different fees, ATM networks, and rewards, so be sure to assess your options. Some banks may offer certain perks for opening a new account or using your debit card regularly, while others may have more flexible options that allow you to avoid fees.
Open an account with your financial institution of choice
Regardless of where you open it, you can’t have a debit card without some sort of bank account—such as a checking or a money market account—tied to your debit card. Once you’ve chosen a bank, open a checking account or money market account with them.
Activate your debit card
When you receive your card, it should come with instructions on how to activate it. This typically involves calling a phone number or going online.

Earn cash back with your debit card

Discover Bank, Member FDIC

More and more people are using debit cards and other digital forms of payment to make purchases. According to a 2022 study by the Pew Research Center, roughly 40% of Americans say that in a typical week, none of their purchases are made with cash. This number has increased by 12% since 2018. Now that you know how to get a debit card, you can more easily make digital payments, too.

How old do you have to be to get a debit card?

You can usually be any age to have and use a debit card, but if you’re under 18, you’ll need a legal guardian to open the linked account for you.

A debit card is a first step toward financial freedom

Getting your first debit card may seem intimidating, but once you find the card that’s right for you, it’s a breeze. In fact, there are many perks to having a debit card—especially if you know how to use a debit card to your benefit.

If you’re looking for a card that gives you free access to over 60,000 ATMs, no fees, and awesome rewards like 1% cash back, then Discover Cashback Debit could be for you.

Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.

Source: discover.com

Apache is functioning normally

July 7, 2023 by Brett Tams

Rachel Richards retired at age 27 thanks to real estate. Whether you’re looking to retire or hit a short-term financial goal, you won’t want to miss today’s podcast. In this interview, Rachel shares the secret to accomplishing any goal and offers financial tips that will help you achieve that next milestone. Rachel also talks syndication, discusses how to reduce the cost of divorce, and more.

Listen to today’s show and learn:

How Rachel Richards retired at age 27 [4:23]
Why cutting costs is only part of the financial-freedom equation [7:56]
An argument for frugality [11:38]
How delayed gratification ties in with financial freedom [14:43]
Aaron’s five-day water fast [15:50]
Why motivation really matters [17:27]
About Rachel Richards’ books: Money Honey and Passive Income, Aggressive Retirement [23:05]
Why Rachel sold most of her rentals [24:50]
The problem with cheap real estate rentals [27:26]
What syndications are and why Rachel Richards loves investing in them [30:18]
How to find the right syndicator [32:54]
How to vet potential syndicators [34:47]
Rachel Richards’ financial advice on prenups [39:34]
How to reduce the cost of divorce [46:35]
Why it makes financial sense to cut the attorneys out [48:44]
Where to find and follow Rachel Richards [50:18]

Rachel Richards

Rachel Richards built a real estate portfolio of 38 rental units by the age of 26. She is a 2X bestselling author and has been featured in Forbes, CNBC, and Business Insider. She makes the topic of money management fun, entertaining, and simple for her 450,000+ millennial followers. Rachel helps women feel excited, capable, and confident about their financial futures.

Rachel has a Bachelor of Science in Financial Economics from Centre College. She has held roles as a licensed financial advisor, a real estate analyst, and a senior finance analyst.

Rachel is based out of Colorado.

Related Links and Resources:

Thank You Rockstars!

It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.

-Aaron Amuchastegui

Source: realestaterockstarsnetwork.com

Apache is functioning normally

July 7, 2023 by Brett Tams

With the S&P 500 still down more than a third from its 2007 high, we’re all a little unsure about our retirement plans these days. So it’s time for some good old-fashioned elbow grease. A little effort now should make for a lifetime of security and peace of mind. And the first step is to run your numbers through financial calculators to estimate whether you’ll have enough saved to kiss the boss goodbye. (Metaphorically, of course.)

The calculators’ answers are important information. But what’s even more useful is changing the variables to see what most improves your chances for success. A retirement plan has a lot of moving parts — how much you save, where you live, when you start taking Social Security benefits — and some decisions will have a bigger effect on your nest egg than others.

The factors that have the biggest impact on a retirement plan vary from person to person. But to demonstrate how you can fiddle with your factors to analyze your own plan, let’s examine the retirement prospects of a hypothetical worker — whom we’ll call Hilda, as I’m a sucker for good German names — and see how dialing her numbers one way or the other changes her projected retirement income. Here are Hilda’s particulars:

Age: 55
Marital status: Single
Current income: $60,000
Desired retirement age: 65
Desired retirement income: $45,000
Estimated age at death: 95
Current savings: $100,000
Annual contributions to retirement accounts: $6,000
Assumed annual return on investments: 8%

For our analysis, we’ll use the “Am I saving enough? What can I change?” calculator found among the retirement calculators at The Motley Fool. Once you’ve entered your numbers and hit the “results” button, the calculator provides the number of months that it estimates your savings will last given your desired retirement income. In Hilda’s case, here’s the calculator’s analysis: “Your living expenses after retirement will be fully funded for 127 months.” Divide by 12, and you see that her money is expected to last 10.6 years. Unfortunately, that’s not good enough. If she wants to retire at 65 and expects to live until 95, she needs her money to last 30 years, or 360 months.

So what should Hilda do? Here are her options and possible outcomes, adjusted a single factor at a time.

Save More
Hilda’s current savings rate is 10% of her income. What if she ups that to 15%, or $9,000 this year? According to our calculators, that will make her income last 155 months — an additional 2.3 years. That’s a fine first step, but it still has her running out of money in less than 13 years.

Let’s say she, through a drastic lifestyle reduction, managed to contribute the maximum to her 401(k), which in 2009 is $22,000 for someone age 50 and older. That would supersize her portfolio enough to last an estimated 322 months, much closer to the 360-month mark. But she probably can’t save 36% of her income. She’ll have to look at other options.

Spend Less in Retirement
What if Hilda decides she can live on a retirement income of $40,000 instead of $45,000? After all, she’ll no longer be stuffing her 401(k) or paying Social Security and Medicare taxes (7.65% of each and every paycheck), and her income-tax bill will drop, too. Maybe she’ll also have eliminated her mortgage by then.

Dropping her annual income requirements by $5,000 adds 51 months (4.3 years) to her portfolio’s estimated lifespan. Not huge, but not negligible, either. However, Hilda feels this would be cutting costs a little too close. She wants to look at other possibilities.

Retire Later
What happens when Hilda continues to save just 10% of her income but retires at 68 rather than 65? In that case, she’d have three more years of saving, a higher Social Security benefit (because of her higher lifetime earnings and her beginning benefits later), and she’d need her money to last just 324 months.

In this case, her money would last 255 months, or 21.3 years. By retiring three years later, she’s doubled the longevity of her portfolio. But it still won’t last until age 95. However, if she retires just one more year later — at 69 — the calculator estimates her money will last longer than she will, which is the goal of any retirement plan.

Work in Retirement
Unfortunately, Hilda can’t stand the thought of working full-time for more than another decade. However, she’s open to the idea of working part-time for the first five years of her “retirement.” If she earns $30,000 in each of those five years, her portfolio’s life expectancy improves from 127 months to 237 months, or almost 20 years. That doesn’t get her to age 95, but it’s a significant improvement. In fact, for every year she works part-time in retirement, she adds about two years to the estimated endurance of her portfolio.

Quick note: Because Hilda’s “full retirement age” for Social Security purposes is 66, she shouldn’t begin taking Social Security until then if she’s still working. When you begin benefits before your full retirement age but then earn work-related income, your benefit can be significantly reduced.

Tap Home Equity
There are a few ways to use home equity to boost your retirement. Let’s see how Hilda could add these to her calculations.

First, let’s assume that she no longer needs her family-sized home. She actually has some equity in the home, so she sells it, buys a smaller home, and comes out with an extra $50,000. Realistically, given the state of real estate these days, it would take at least a year to sell her house and actually get that $50,000 into her hands to invest. If it earns 8% a year, it would add 58 months — almost five years — to the longevity of her savings. That’s a decent-sized boost, and that’s not counting the lower cost of heating, cooling, maintaining, and paying property taxes on a smaller home.

The other option is a reverse mortgage, which is when a bank pays you money based on the value of your home, and you don’t pay it back until you move. A reverse mortgage on a home currently worth $300,000 could provide a check of $1,200 every month that the borrower stays in the house, according to www.reversemortgage.org. Our retirement calculator doesn’t have an input field for reverse mortgage, but since it operates essentially like a pension, that’s where we’ll add the $1,200. Input “30” in the “Years you will receive payments” field, and check the “First payment adjusted for inflation” button (but not the others). Click on the results and — voila! — Hilda’s retirement is fully funded.

While that’s encouraging, we should mention that it assumes Hilda’s mortgage is paid off before she takes out the reverse mortgage. If she moves before she passes away, she’ll have to pay off the loan. Plus, reverse mortgages can be expensive. So our preference is to put off taking out a reverse mortgage for as long as possible, perhaps using it only in the case of an emergency, such as needing in-home long-term care.

Note: There’s a helpful infographic on reverse mortgage myths which can be useful on seeing if this might be the right choice for you.

Change Your Expiration Date
Of course, Hilda’s original retirement plan is perfect as long as she dies within 127 months of retiring. All jokes aside, it’s worth remembering that we’re playing it very safe by assuming she’ll live to 95. According to the Social Security actuarial tables, only 10.3% of 55-year-old women make it to 95. If Hilda’s not in good health or longevity doesn’t run in her family, she might assume she’ll die at age 90. That doesn’t change how long her portfolio will last, but it does change how long she’ll need it to last.

A Mixture of the Factors
We looked at many variables in isolation, but the best solution for Hilda is to tweak several categories to find a combination of changes that she finds palatable. For example, if Hilda downsizes to a smaller home (resulting in a $50,000 investment a year from now), saves $200 more a month, delays retirement to age 66, and works part-time for the first two years of her retirement, her money will last until she’s 95. Considering all her options, Hilda decides these are adjustments she can live with.

The Bottom Line
Retirement calculators are very handy tools, but they’re not crystal balls. The results are based on many variables — such as inflation, investment returns, and Social Security benefits — that we can’t predict and could turn out worse than expected.

How should you handle this uncertainty? Run your numbers once a year, using updated account balances, savings or cd rates, and benefits projections (for example, put in the estimated Social Security benefit found in the statement you receive in the mail three months before your birthday each year).

Also, different calculators provide different results, so don’t rely on just one. For additional opinions, check out:

Despite their shortcomings, retirement calculators do a good job of estimating the value of one decision over another. For Hilda, the variable that had the biggest impact on her plan was retiring a few years later. But it will be different for other people. As one example, boosting a savings rate from 10% to 15% would have a much bigger payoff for younger investors than it did for Hilda, who was already within a decade of her target retirement date.

What will provide the most power to your plan? There’s only one way to find out. Visit a financial calculator and start plugging away.

Source: getrichslowly.org

Apache is functioning normally

July 7, 2023 by Brett Tams

Current mortgage rates are moving sideways today. We got a Consumer Price Index reading that was underwhelming, signaling to investors that the Fed might not be reading to hike rates at an aggressive pace just yet. Our recommendation remains, however, for borrowers to lock in a rate sooner rather than later. Read on for more details.

[embedded content]

Market Outlook 3.12.18 from Total Mortgage on Vimeo.

Where are mortgage rates going?

Mortgage rates hold steady after CPI

It’s another snowy morning here Connecticut. If there’s anything more fickle than mortgage rates, it’s the weather in New England. Anyway, the big economic event for the day was the Consumer Prices Index.

Financial market participants were let down by the average hourly earnings reading in the monthly jobs report for February last Friday, and therefore eagerly anticipating another inflation reading today.

In similar fashion, the CPI reading came in with a mere 0.2% rise from the previous month. Anyone looking for a breakout in inflation was sorely disappointed.

The resulting market reaction was what you would expect, stocks moving higher and Treasury yields moving lower. The yield on the 10-year Treasury note (which is the best market indicator of where mortgage rates are going), dropped down a few basis points right after the report was released.

However, we’ve seen the 10-year yield inch back up to where it started the day since then. Mortgage rates typically move in the same direction as the 10-year yield, so we’re seeing rates just about flat on the day.

Rate/Float Recommendation

Lock now before rates move any higher

Mortgage rates have increased dramatically so far in 2018. The end doesn’t seem to be anywhere in sight, either, as many analysts are calling for the 30-year fixed rate to climb all the way up past 5% at some point this year.

Learn what you can do to get the best interest rate possible.

Given this expectation, the smart decision for most borrowers is going to be to lock in a rate as soon as possible. The longer you wait on a purchase or refinance, the more likely it is you’ll be paying more with a higher rate.

Today’s economic data:

NFIB Small Business Optimism Index

The NFIB Small Business Optimism Index hit a 107.6. That’s slightly higher than the 107.0 that analysts had expected. This is the second highest level in the history of the reading.

Consumer Price Index

Consumer Prices ticked up 0.2% from the previous month in February. That puts it up 2.2%, year over year. CPI less food and energy also rose 0.2%, month over month, bringing it to 1.8%, year over year.

Notable events this week:

Monday:

10-Yr Note Auction

Tuesday:

NFIB Small Business Optimism Index
Consumer Price Index

Wednesday:

PPI-FD
Retail Sales
Business Inventories
EIA Petroleum Status Report

Thursday:

Jobless Claims
Philadelphia Fed
Empire State Mfg Survey
Import and Export Prices
Housing Market Index

Friday:

Housing Starts
Industrial Production
Consumer Sentiment
JOLTS

*Terms and conditions apply.

Carter Wessman

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

Source: totalmortgage.com

Apache is functioning normally

July 7, 2023 by Brett Tams

A variety of important mortgage rates inched upward over the last seven days. The average interest rates for both 15-year fixed and 30-year fixed mortgages both made gains. For variable rates, the 5/1 adjustable-rate mortgage also rose.

After hiking interest rates 10 times since March 2022, the Federal Reserve pumped the brakes during its June meeting. The central bank’s benchmark federal funds rate will remain at a range of 5.00% to 5.25% for the time being, although the Fed hasn’t ruled out the possibility of further increases if inflation doesn’t continue to moderate.

As long as inflation continues to trend downward, experts say a pause in rate hikes from the Fed could bring some stability to today’s volatile mortgage rate market.

Current Mortgage Rates for July 2023

Mortgage rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.

Mortgages hit a 20-year high in late 2022, but now the macroeconomic environment is changing again. Rates dipped significantly in January before climbing back up in February. Aside from a brief surge towards the end of May, rates continue to fluctuate in the 6% to 7% range.

Even though the Fed hit pause on rate hikes, mortgage interest rates will continue to fluctuate on a daily basis. That’s because mortgage rates aren’t tied to the federal funds rate in the same way other products are, such as home equity loans and home equity lines of credit, or HELOCs. Mortgage rates respond to a variety of economic factors, including inflation, employment and the broader outlook for the economy.

“Mortgage rates will continue to ebb and flow week to week, but ultimately, I think rates will stick to that 6% to 7% range we’re seeing now,” said Jacob Channel, senior economist at loan marketplace LendingTree. “I don’t anticipate them to spike or even show a sustained spike following this meeting,” Channel said.

Overall, inflation remains high but has been slowly, but consistently, falling every month since it peaked in June 2022.

After raising rates dramatically in 2022, the Fed opted for smaller, 25-basis-point increases in its first three meetings of 2023. The decision to hold rates steady on June 14 suggests that inflation is cooling and ongoing rate hikes may no longer be necessary to bring inflation down to the Fed’s 2% target. The central bank is unlikely to cut rates any time soon, but positive signaling from the Fed and cooling inflation may ease some of the upward pressure on mortgage rates.

“Rates are getting to a point of being steady. So, it’s more a question of how long it will take for rates to start ticking back down and when inflation will return to a place where your dollar starts buying a little bit more each month,” said Kevin Williams, founder of Full Life Financial Planning.

However, mortgage rates remain well above where they were a year ago. Fewer buyers are willing to jump into the housing market, driving demand down and causing home prices in some regions to ease, but that’s only part of the home affordability equation.

“Interest rates have been much higher in the past and people bought homes and financed homes at those rates. But it’s been hard for people to react to such a rapid increase in just a short amount of time,” said Daniel Oney, research director at the Texas Real Estate Research Center at Texas A&M University. “Everybody had a target for how much they needed to save in order to go into the housing market, but when interest rates increased, those goal posts moved too,” he added.

What does this mean for homebuyers this year? Mortgage rates are likely to decrease slightly in 2023, although they’re highly unlikely to return to the rock-bottom levels of 2020 and 2021. However, rate volatility may continue for some time. “Expect mortgage rates to yo-yo up and down in the first half of the year, at least until there is a consensus about when the Fed will conclude raising interest rates,” said Greg McBride, CFA and chief financial analyst at Bankrate. McBride expects rates to fall more consistently as the year progresses. “Thirty-year fixed mortgage rates will end the year near 5.25%,” he said.

Rather than worrying about market mortgage rates, homebuyers should focus on what they can control: getting the best rate they can for their situation.

“The most important thing is that they find the right home. The second most important thing is obviously to find the most efficient way to finance it,” said Melissa Cohn, regional vice president of William Raveis Mortgage.

Take steps to improve your credit score and save for a down payment to increase your odds of qualifying for the lowest rate available. Also, be sure to compare the rates and fees from multiple lenders to get the best deal. Looking at the annual percentage rate, or APR, will show you the total cost of borrowing and help you compare apples to apples.

30-year fixed-rate mortgages

The average 30-year fixed mortgage interest rate is 7.31%, which is an increase of 14 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed mortgage will often have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 6.59%, which is an increase of 9 basis points from seven days ago. You’ll definitely have a higher monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. But a 15-year loan will usually be the better deal, as long as you can afford the monthly payments. You’ll usually get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 6.17%, an uptick of 10 basis points compared to a week ago. For the first five years, you’ll usually get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. But changes in the market could cause your interest rate to increase after that time, as detailed in the terms of your loan. Because of this, an ARM could be a good option if you plan to sell or refinance your house before the rate changes. If not, shifts in the market could significantly increase your interest rate.

Mortgage rate trends

Mortgage rates were historically low throughout most of 2020 and 2021 but increased steadily throughout 2022. Now, mortgage rates are roughly twice what they were a year ago, pushed up by persistently high inflation. That high inflation prompted the Fed to raise its target federal funds rate seven times in 2022. By raising rates, the Fed makes it more expensive to borrow money and more appealing to keep money in savings, suppressing demand for goods and services.

Mortgage interest rates don’t move in lockstep with the Fed’s actions in the same way that, say, rates for a home equity line of credit do. But they do respond to inflation. As a result, cooling inflation data and positive signals from the Fed will influence mortgage rate movement more than the most recent 25-basis-point rate hike.

We use data collected by Bankrate to track changes in these daily rates. This table summarizes the average rates offered by lenders across the US:

Average mortgage interest rates

Product	Rate	Last week	Change
30-year fixed	7.31%	7.17%	+0.14
15-year fixed	6.59%	6.50%	+0.09
30-year jumbo mortgage rate	7.34%	7.20%	+0.14
30-year mortgage refinance rate	7.41%	7.27%	+0.14

Rates as of July 7, 2023.

How to shop for the best mortgage rate

When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. In order to find the best home mortgage, you’ll need to take into account your goals and overall financial situation.

Specific mortgage interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a good credit score, a higher down payment, a low DTI, a low LTV or any combination of those factors can help you get a lower interest rate.

Beyond the mortgage interest rate, other factors including closing costs, fees, discount points and taxes might also factor into the cost of your house. Make sure to shop around with multiple lenders — such as credit unions and online lenders in addition to local and national banks — in order to get a mortgage that’s the right fit for you.

What is a good loan term?

One important thing you should consider when choosing a mortgage is the loan term, or payment schedule. The mortgage terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are the same for the duration of the loan. For adjustable-rate mortgages, interest rates are set for a certain number of years (typically five, seven or 10 years), then the rate changes annually based on the market interest rate.

When choosing between a fixed-rate and adjustable-rate mortgage, you should consider how long you plan to live in your house. For those who plan on living long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer more stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. If you don’t have plans to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage may give you a better deal. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. Be sure to do your research and think about your own priorities when choosing a mortgage.

Source: cnet.com

Apache is functioning normally

July 7, 2023 by Brett Tams

Get a handle on the real estate market now as you’re figuring out when to buy a home.

valentin russanov/Getty Images

In this high-interest-rate environment, many prospective homebuyers are put off by high mortgage costs. Homes that might have been in your budget in the past might no longer be affordable when accounting for monthly interest payments.

But that doesn’t mean the situation is totally out of your control. While mortgage timing can be tricky, you might decide to wait to see if interest rates drop, as many experts predict will happen in the next year or so.

You can also take a number of steps to improve your financial situation and get a handle on the real estate market now as you’re figuring out when to buy a home.

See where today’s mortgage rates stand here.

What prospective homebuyers should do until interest rates drop

In particular, some action items to consider as you wait to see what happens with mortgage interest rates include the following expert-recommend tips:

Figure out what you want

If you’re waiting to see what happens with interest rates, use this time to do more research. That includes narrowing down what you want in a home and what you can realistically afford.

“Use this time to refine exactly what you’re looking for in your next home, including things like what your budget can buy you and what your ‘needs’ and ‘wants’ are,” says Merav Bloch, VP and GM of Opendoor Exclusives. “If you’re willing to trade a longer commute for your dream yard, but your partner wants to be within a 10-minute drive of their office, now is an opportune time to debate that trade-off.”

Even if you’re not necessarily ready to buy right away, you can still tour homes.

“I encourage buyers to see what’s out there and tour as many homes as possible to get a sense of what your budget will get you, what your non-negotiables are and what neighborhoods you’re open to,” Bloch says. “People typically don’t get married on the first date, and it’s usually better not to purchase the first home you tour.”

Start your mortgage search online now.

Talk to experts

As you figure out what you want in a home, it can help to talk to experts like mortgage consultants and real estate agents to narrow down what’s realistic for you.

Tanya Ball, home loans regional director at BOK Financial, suggests asking experts about down payment assistance options as well as “specialized loan programs if you are a veteran, Native American, first-time buyer or buying in a rural area.”

Plus, speaking with an expert like a mortgage professional “can let you know which items to focus on for better offers — for example, a higher down payment or paying off debt,” says Michael Merritt, mortgage servicing operations manager at BOK Financial. “The biggest benefit will vary based on your circumstances, so it is important to focus on the things that will help you the most.”

Improve your credit score

For some prospective homebuyers, improving your credit score can make a significant difference in the mortgage rate you qualify for.

“Lenders typically offer better interest rates and loan terms to borrowers with higher credit scores, so taking steps to improve your credit can help you get the best possible deal on your mortgage,” says Adie Kriegstein, licensed real estate salesperson at Compass Real Estate. “This might include paying down existing debt, making all of your payments on time and avoiding new credit inquiries or applications.”

Build up your down payment

Another way to take advantage of this time waiting for interest rates to stabilize or drop is to build up your down payment. The more you can put down, the less you have to borrow and therefore pay interest on. Plus, a higher down payment could potentially get you a lower interest rate.

“A strategy I recommend, especially for first-time home buyers, is to deposit the difference between your current housing payment and your projected payment into a high-yield account each month. This helps grow your down payment or the amount you can use to pay down debts and is a test for your expected budget to see if it is workable,” says Merritt.

Check out today’s mortgage offerings here.

Shop around

Don’t assume that what one lender offers you is the same as what all other banks and mortgage providers offer. Your borrowing limits, interest rates and terms can vary from lender to lender, so it pays to shop around.

You also might find that paying for mortgage points with some lenders (where you pay money upfront to lower your interest rate), or choosing adjustable-rate mortgages rather than fixed-rate loans, works out in your favor.

“It’s an interesting quirk of human nature that many of us would drive across town to save 30% on a sofa but not necessarily compare rates and financing options on a house-sized purchase,” says Bloch.

“If you’re waiting to buy, this is a great time to shop lenders and financing options, including lesser-known options like rate buydowns. In this market, buyers are acutely aware of interest rates, but they’re less aware of options to reduce their monthly payments,” Bloch says.

Improve your current home

Lastly, if you already own a home, you can use this time to improve your current home to try to get more money when you eventually sell. That can help offset the cost of high interest rates.

One idea is to get a home inspection now, says Jonathan Rundlett, a real estate agent and regional owner at EXIT Mid-Atlantic.

“This will allow you to take the time that you are waiting for interest rates to fall to make any repairs or updates that the inspector finds in your home,” Rundlett says. “Making any necessary repairs and updating your home so that it shows in move-in ready condition will allow you to get top dollar for your home when you are ready to sell.”

The bottom line

These action items can help many prospective homebuyers better position themselves as they wait to see what happens with interest rates. But it’s important to remember that the specific ways to improve your situation depend on personal factors

like your credit history, savings and income.
And while you might try to time mortgage purchasing, it’s difficult to know when to buy a home, as it can be both a financial and emotional decision. Some people might be comfortable paying more for their dream home, while others might want to wait to get a good deal on a mortgage interest rate. Weigh the pros and cons, and consider speaking with experts for personalized advice.

Source: cbsnews.com

What’s our Federal Reserve concerned about? I was in a restaurant last night in Truckee, California, and was shown the table and handed the menu. When the waiter came back five minutes later, he said, “While you were deciding, we raised our prices.” Okay, a little inflation exaggeration humor there, but things are certainly always changing. Remember when everyone thought Amazon or Zillow were going to take over lending? Zillow is shuttering its closing and title services division. Something else that always changes is the population: 10,000 people a day turn 62, and many are eligible for a reverse mortgage, and so many lenders and LOs see reverse being a growth field. (Carol Ann Dujanovich, VP/Director of Reverse Mortgage Operations with University Bank, is featured on today’s 30 minute Rundown at 12PM PT on what’s made its Reverse Platform successful over the years.) (Today’s podcast can be found here and this week’s is sponsored by Gallus, the premier business intelligence tool for the mortgage industry. With hassle-free insights and user-friendly functionality, Gallus empowers you to make faster, data-driven decisions for enhanced profitability. Hear an interview with Michele Kryczkowski on business development in the mortgage industry and the best way to support sales teams.)

Lender and Broker Software, Services, and Products

Check out Quorum Federal Credit Union’s Sizzling Summer Limited-Time Special Offers. With turn times as fast as 24-hours and expanded guidelines, including up to 90% on a Primary Residence and 80% CLTV on Second Homes and Investment Properties, we’ll help clear any financial hurdles. In addition, Quorum partners with an executed agreement have the opportunity to earn up to 2.00% borrower-paid broker compensation on the entire line amount. There are no minimum draws and no early termination fees. Terms and conditions apply. Contact your Quorum Account Executive, visit Quorum’s Partner Portal or email for more information.

“AFR Wholesale® (AFR) is excited to announce the next session of our Why Wait Live Webinar Series with Freddie Mac on Wednesday, July 12th, at 1PM EST. Please join AFR and Freddie Mac to discuss Renovation, where we will primarily be highlighting CHOICERenovation® and CHOICEReno eXPress®. Over this series, AFR is emphasizing affordable financing solutions that provide homeownership opportunities to more families. The goal is to take the prospects in your portfolio and turn them into borrowers. Register today! This will be a live webinar and a recording and will not be provided, so sign up today and don’t miss it! If you are currently a partner of AFR you can start utilizing these programs right away! Contact AFR by going to afrwholesale.com, email or call 1-800-375-6071.

Serving the underserved community, Non-QM is an essential part of the mortgage ecosystem. With the number of borrowers served continuing to rise and the market share of Non-QM growing, now is the time to learn more about these products. To help this, we are proud to announce the National Mortgage Professional Non-QM Townhall Monthly Series, brought to you by industry-leading ACC Mortgage, Deephaven and NewFi Wholesale. Moderated by Steven Winokur, this impactful series will be conducted with such Non-QM experts as Tom Davis, Robert Senko, and John Wise. Each month a set of topics will be discussed, giving you the info you need to successfully implement and grow your Non-QM origination business. The first in the series will be held on Thursday, July 27th at 2:00 EST/11:00 PST. If you want to learn more about the current state of Non-QM, this is a series you do not want to miss. Register today!

Newfi, an industry-leading lender specializing in non-agency mortgage solutions, is proud to announce the launch of its correspondent lending channel! As an affiliate of Apollo Global Management, Newfi Correspondent stands ready to help mortgage bankers with the benefit of Apollo’s expansive resources and mortgage expertise. They offer a variety of Non-QM offerings including loan amounts up to $5M, alternative income (bank statement, 1099, asset depletion & more) and DSCR loans. Are you a mortgage banker ready to learn more? To support this expansion into correspondent lending Newfi is actively seeking to hire experienced Non-QM Correspondent Account Executives. If you are interested in learning more or applying, please contact Dan Bayer or Dean Reynolds for more information.

Conventional Conforming Program News

The Federal Housing Finance Agency is the conservator of not only Freddie Mac and Fannie Mae, but also oversees the Federal Home Loan Bank system. FHFA officials are considering imposing new limits on large banks’ use of the Federal Home Loan Bank system. The changes are reportedly being discussed as part of the agency’s review of the system, which is expected to conclude in September.

FHFA published its 2023 first quarter data for the Uniform Appraisal Dataset (UAD) Aggregate Statistics. For the first time, FHFA’s UAD Aggregate Statistics include data on residential property sales comparisons (“comparables”).

Freddie Mac AIM Check API, gives you a preliminary view (as early as point of sale) of a borrower’s qualifying income for a Freddie Mac-eligible loan before submitting a full application to Loan Product Advisor® (LPASM). This Origination API allows users to access Freddie Mac AIM capabilities independent of an LPA submission.

Freddie Mac is committed to working with housing finance agencies (HFAs) to advance affordable homeownership. Its HFA Resource Center is comprised of products and resources to reinforce your efforts in promoting and sustaining homeownership.

Freddie Mac updated Loan Product Advisor® (LPASM) and the new Area Median Income and Property Eligibility Tool with new AMI limits. If you participate in an HFA program, consult the HFA’s website for income eligibility and associated pricing of their Freddie Mac HFA Advantage® offerings. AMI limits are also used to determine whether a loan is eligible for the credit fee cap for first-time homebuyers.

Freddie Mac’s quarterly housing outlook pulse survey, Housing Sentiment in Q1 ’23. COVID-19 led to an increase in migration away from larger, more expensive areas toward more affordable ones. Read Freddie Mac’s research brief for a deeper dive. Low-Income Homebuyers are Less Likely to Migrate from Cities, More Likely to Miss Potential Cost Savings.

The Uniform Appraisal Dataset (UAD) and Forms Redesign team has released additional documentation to support ongoing implementation efforts. These resources supplement the initial documentation that was released in March 2023 to kick off industry development and preparation for the new appraisal dataset and report. This update includes additional Uniform Residential Appraisal Report (URAR) examples for various property types and more information on technical requirements. Read the joint GSE announcement and check out the resources to learn more.

Fannie Mae posted information on the Uniform Appraisal Dataset (UAD) and Forms Redesign team release of additional documentation to support ongoing implementation efforts. These resources supplement the initial documentation that was released in March 2023 to kick off industry development and preparation for the new appraisal dataset and report. This update includes additional Uniform Residential Appraisal Report (URAR) examples for various property types and more information on technical requirements.

Fannie Mae issued a Fraud Alert involving income misrepresentation using fabricated/altered public records documenting alleged court-ordered child and spousal support payments. This alert addresses loans originated in Northern California.

Capital Markets

A third consecutive day of selling in the bond markets yesterday was the net balance between reaction to Wednesday’s release of the June Federal Open Market Committee meeting minutes, strong job data, and anticipation of today’s June Nonfarm Payroll report. As was reported in this commentary yesterday, FOMC members at their meeting last month expressed a lot of concern toward “continued resilience in the economy” and “persistently elevated core inflation.” The Fed believes that to bring aggregate supply and aggregate demand into better balance and reduce inflationary pressures sufficiently to return inflation to 2 percent over time, a period of below-trend growth in real GDP and some softening in labor market conditions will be required.

Sure, inflation for most countries around the world doesn’t match Sudan at 340 percent, Lebanon at 201 percent, or Syria at 139 percent. Nor are people hauling around wheelbarrows full of cash to buy a loaf of bread. The global fight against pandemic-era inflation has prompted projections ranging from recessions to soft landings. The labor market here in the U.S. is certainly strong.

We are seeing resilience rather than softening in the U.S. labor market, which helps those hoping for a soft-landing, but makes the Fed’s job more difficult and all but ensures more rate hikes. That resilience was evidenced yesterday, as private hiring surged (ADP employment number came in at 497k, the most in over a year, versus the expected 225k), layoffs slowed to an eight-month low (companies had a difficult time finding workers during the COVID-19 pandemic and are probably reluctant to let them go), and filings for unemployment benefits stayed relatively low. This “hardly believable” strength of the U.S. labor market should further push out any concept of a possible recession but should also push out of the market any hopes of a Fed rate cut during 2023.

Accordingly, the fed funds futures market is now a coin-toss when it comes to a November rate hike after a near-certain increase in July. Volatility dropped in June, if ever so slightly, and has been moving sideways of late, but could begin to trend downward once the Fed ends its current rate hiking cycle and investors come to terms with the fact that rates will likely stay elevated for much longer than is expected. Fed fund futures markets no longer see a rate cut by year-end.

Beyond the next few months, the inflation outlook (which is driving rate hike/cut predictions) largely depends on how resilient the economy proves in the second half of the year. The drastic tightening of monetary policy over the past 16 months means that the economy’s most likely path is a modest contraction of real GDP as businesses run down excess inventories. As activity slows in the sectors that are most sensitive to interest rates, like construction and manufacturing, the unemployment rate will likely tick higher over the next 12 months. This will further soften businesses’ pricing power, and slow inflation further.

Today brings the June employment report which could add further volatility to this week’s bond rout. Recent improvements in home affordability have been driven by wage growth. Headline payrolls in June increased 209k versus 230k expectations and 339k in May (revised down to 306k). The unemployment rate came in as expected at 3.6 percent when it was seen ticking down 0.1 percent to 3.6 percent, and hourly earnings were +.4 percent, +4.4 percent for the year. We begin the day with Agency MBS prices a few 32nds better, the 10-year yielding 4.01 after closing yesterday at 4.04 percent, and the 2-year at 4.94 percent. The 2-year/10-year curve sits at more than -100 basis points, within spitting distance of the largest inversion since the early 1980s. The inversion is being driven by concern over the chance of a recession and the fact traders have largely unwound bets for Federal Reserve rate cuts by year end.

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Learn what you can do to get the best interest rate possible.

Today’s economic data:

NFIB Small Business Optimism Index

Consumer Price Index

Notable events this week:

Monday:

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Wednesday:

Thursday:

Friday:

Carter Wessman

Current Mortgage Rates for July 2023

30-year fixed-rate mortgages

15-year fixed-rate mortgages

5/1 adjustable-rate mortgages

Mortgage rate trends

Average mortgage interest rates

How to shop for the best mortgage rate

What is a good loan term?

What prospective homebuyers should do until interest rates drop

Figure out what you want

Talk to experts

Improve your credit score

Build up your down payment

Shop around

Improve your current home

The bottom line

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Solar for LOs; New Correspondent, Non-QM, Renovation Products; Freddie and Fannie News; Job Numbers Move Mortgage Rates

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Is the Fed finished raising interest rates?

The Fed’s role and June’s FOMC meeting

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