Principal received an honorable mention on the list of Good Financial Cents Best Life Insurance Companies.
They are very solid financially and are a great option if they have the best rates when you run your quotes.
The History of Principal Life Insurance Company
The Principal Financial Group – also known as The Principal – was founded in 1879. This global investment management leader has been offering individuals and companies financial and insurance solutions for more than 135 years.
Since its founding, the company has grown considerably – today having more than 14,800 employees worldwide – of which roughly 10,000 are in the United States alone. The Principal is a stock company, and it trades on the New York Stock Exchange under the ticker symbol PFG.
Principal Life Insurance Company Review
Although it is known worldwide, the Principal is bound by one common purpose, and that is to provide its customers with the financial tools, resources, and information that they require to live the best lives that they can.
The Principal offers insurance, investment products, and retirement plans to both individuals and businesses. This large insurer currently has more than 19 million customers around the globe in 18 countries, and it holds more than $547 billion of assets under management. Its products and services are provided by a diverse network of companies and advisors.
This carrier has been noted as one of the World’s Most Ethical Companies, as well as One of America’s Best Employers, and the #3 Greenest CRE Company. It has also attained some additional accolades, including:
#1 Provider of Defined Benefit Retirement Plans
#1 Record Keeper of Employee Stock Ownership Plans
#1 Provider of Nonqualified Deferred Compensation plans
The Principal provides a great deal of information about its products and services on its website. Customers can also reach a customer service representative if they need help or if they have a question or a concern. A representative can easily be reached via a toll-free phone line, as well as via email.
Financial Strength and Ratings of Principal Life Insurance Company
The Principal has an excellent reputation as far as paying out it claims to its insurance policyholders.
Because of this, it has been provided with very high ratings from the insurer rating agencies.
These include the following:
A+ (Superior) from A.M. Best
AA- (Very Strong) from Fitch
A1 (Good) from Moody’s Investors Service
A+ (Strong) from Standard & Poor’s
Life Insurance Products Offered by Principal Life Insurance Company
Principal Life Insurance Company offers both term and permanent life insurance solutions. This can help its customers to better plan for their specific coverage needs when planning for the protection that they require – regardless of the stage of life that they are in.
Term Life Insurance Coverage through The Principal
With term life insurance, pure death benefit only coverage is provided, without any cash value or investment build up included in the policy. Because of that, term life insurance can often be more affordable than permanent coverage – primarily if the applicant is young and in good health. This can allow for the purchase of a larger amount of protection at an affordable premium price.
Term life insurance is often thought of as being “temporary” life insurance protection. This is because it is purchased for certain periods of time – or “terms” – of coverage such as for ten years, 15 years, 20 years, 25 years, or even for 30 years. However, when the term of coverage expires, it is necessary for the insured to purchase a new policy, at their then-current age and health condition, if they want to remain insured. However, in some cases, a term life insurance policy may offer a conversion feature whereby the insured may convert his or her policy over to a permanent form of life insurance. The Principal offers this feature on many of its term life insurance policies – and the insured will not need to provide additional evidence of insurability.
Permanent Life Insurance Coverage Through the Principal
Permanent life insurance coverage provides death benefit coverage, and it also has a cash value component as a part of the policy. The death benefit in a permanent policy will last for the remainder of the policy holder’s life. So, unlike a term policy, there is no time limit. As long as the premium is paid, the policy will remain in force.
The cash value in a permanent life insurance policy is allowed to grow on a tax-deferred basis. What this means is that there is no tax that will be due on the growth of the funds within the cash value until the time that the funds are withdrawn.
The Principal offers three key types of permanent life insurance policies. These include the following:
Universal Life Insurance Coverage
With universal life insurance coverage, there is death benefit protection, as well as cash value build up. A universal life insurance policy is flexible regarding the premium payments, as well as its death benefit protection. It can also provide flexibility concerning when the policyholder pays the premium (within certain guidelines).
With this type of life insurance policy, the cash value can accumulate based upon a floating rate of interest – yet it will have a minimum rate guarantee. In some cases, these policies may also include a secondary interest rate guarantee for even more security.
Variable Universal Life Insurance Coverage
Variable universal life insurance coverage also offers a death benefit, along with a cash component. However, the cash component policyholder be more aggressive by choosing from a variety of different market linked investments. This can allow funds to grow a great deal more, based on market performance. It can also, however, mean that there is more risk involved. With that in mind, it is important to be aware of risk tolerance before moving forward with a variable insurance product.
As with other types of permanent life insurance, a variable universal life insurance policy will also allow the policy to obtain the benefit of tax-deferred growth within the cash component. In addition, the policy holder will be allowed to either borrow or to withdraw the funds that are in the cash component for whatever need he or she has if they choose to do so.
Also, with this type of policy, the policyholder is allowed to convert the cash value to an annuity for income that he or she cannot outlive. This can help to alleviate the worry in retirement about running out of income – a fear that is held by many retirees today due in large part to our longer life expectancies.
Survivorship Life Insurance Coverage
A survivorship life insurance policy will cover two lives rather than just one. This can be less costly than purchasing two separate life insurance policies. The survivorship plans that are offered by The Principal will pay at the death of the second insured individual. These policies are frequently used for estate planning purposes to leverage various tax deductions.
Other Coverage Products Offered
In addition to life insurance, the Principal Life Insurance Company also offers other types of insurance coverage products. These include the following:
Disability Income Protection
A disability income insurance policy from The Principal can help an individual to protect their financial health from the loss of his or her income due to an injury or an illness.
While many people may think that their most valuable asset is their home or their retirement plan, it is their ability to earn an income. This is because, without the ability to earn, most other assets would be impossible to obtain or to keep.
It is estimated that one in four people who enter the workforce today will become disabled before the time that they retire. Therefore, protecting their income with a disability income policy can be a way to ensure that living expenses will still be paid over time.
With Principal, you can get a plan with as much as $20,000 in monthly benefits. One unique factor is you don’t have to be totally disabled to receive the benefits.
You can choose elimination periods as short as 30 days and benefit periods as long as 5 years. The plan is guaranteed renewable and non-cancelable, which means you don’t have to worry about losing protection.
Principal has a handful of benefits they include with their disability plan at no cost to the policyholder. One unique advantage of Principal’s plan is the death benefit, which will pay out a lump sum if the policyholder passes away while claiming the plan.
They also include a waiver of premium rider, a benefits update rider, future benefit increase rider, and several more benefits.
They also sell several additional riders you can add. They have four options to choose from:
Because of the rates and the benefits of the policy, Principal is one of the most popular options for disability coverage.
Retirement Savings Protection
In addition to just becoming disabled and not being able to earn an income, contributing to a retirement savings plan can also stop if a person is unable to work. Therefore, with retirement savings protection, contributions into retirement savings can continue while a person is not able to work because of a disabling illness or injury. With The Principal’s retirement savings protection, policy holders can insure “what could be” from “what if.”
Annuities from Principal Life
Buying an annuity is an excellent way for you to supplement your retirement income. If you’re shopping for annuities, it’s important that you find the perfect company for you. On top of all of the insurance products, Principal Life also has several types of annuities that they sell. They have four different types that you can invest your money in, depending on what your investment risk is. The four types are:
With a fixed annuity, you can choose how your money grows and select from a couple of different benefits. These annuities allow you to choose from a quick death benefit, emergency access, and IRS minimum distribution notification.There are two separate types of income annuities that are slightly different. Principal has Immediate Income Annuities and Deferred Income Annuities. The Immediate Income Annuities are designed for those that are looking to start getting income in retirement in the next 12 months. As you can probably guess, Deferred Income Annuities are for those that are looking for guaranteed income in the next 13 months or longer.
The next time is the indexed annuity. These annuities are going to give you investment safety, but without sacrificing the potential for more growth. The rates are linked to one or more equity-based indices.
Variable annuities allow you to save for retirement by getting growth that is based on market performance with different kinds of payout options. They have flexibility withdrawal options with tired surrender charges. They also offer some living benefit riders that can protect you from any risk of the market crashing and give you some additional benefits before you start taking withdrawals. A unique benefit that Principal offers with their variable annuities is the Deferred Income Rider, which lets you transfer money from your accumulated value to create more income payments, without having to pay any additional fees.
Average mortgage rates fell just a little last Friday. But last Thursday’s massive jump means they finished that week — and last month — higher than when they started them.
First thing, it was looking as if mortgage rates today might again barely budge. But that could change as the hours pass.
Markets will be closed tomorrow for the Independence Day holiday. And we’ll be back on Wednesday morning. Enjoy your celebrations!
Current mortgage and refinance rates
Program
Mortgage Rate
APR*
Change
Conventional 30-year fixed
7.129%
7.158%
Unchanged
Conventional 15-year fixed
6.638%
6.651%
Unchanged
Conventional 20-year fixed
7.506%
7.558%
Unchanged
Conventional 10-year fixed
6.997%
7.115%
Unchanged
30-year fixed FHA
6.672%
7.303%
Unchanged
15-year fixed FHA
6.763%
7.237%
Unchanged
30-year fixed VA
6.729%
6.937%
Unchanged
15-year fixed VA
6.625%
6.965%
Unchanged
5/1 ARM Conventional
6.75%
7.266%
Unchanged
5/1 ARM FHA
6.75%
7.532%
+0.11
5/1 ARM VA
6.75%
7.532%
+0.11
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock a mortgage rate today?
Recent reporting in the financial media makes me think mortgage rates are unlikely to see any significant and sustained falls until at least the fourth (Oct.-Dec.) quarter of 2023 and probably not until 2024.
And that’s why my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCK if closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time last Friday, were:
The yield on 10-year Treasury notes edged down to 3.82% from 3.85%. (Good for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were mostly lower. (Good for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices inched up to $70.61 from $70.25 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices rose to $1,930 from $1,919 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — climbed to 84 from 80 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today might again hold steady or close to steady. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
What’s driving mortgage rates today?
Currently
To see sustained lower mortgage rates we need to see the inflation rate halving, the economy weakening, and the Federal Reserve stopping hiking general interest rates. And none of those looks likely anytime soon.
Some progress is being made on inflation. But not enough.
And the economy is showing extraordinary resilience. Last week’s gross domestic product (GDP) headline figure was 50% higher than many expected.
Meanwhile, the Fed seems highly likely to hike general interest rates by 25 basis points (0.25%) on Jul. 26. And there may well be at least one more increase after that in 2023.
Recession
As I’ve written before, our best hope for lower mortgage rates is a recession. That should weaken the economy, reduce inflation and perhaps cause the Fed to at least hold general rates steady.
Economists have been predicting an imminent recession for ages. And, not so long ago, I bought that line and was expecting one at any moment.
But, now, many big hitters aren’t expecting a recession until 2024. Yesterday, CNN Business listed a few of those making that prediction:
Bank of America CEO Brian Moynihan
Vanguard economists
JPMorgan Chase economists
Of course, others disagree, as economists always do. Some think a recession will still land later this year. And others believe there will be no recession at all.
This week
There are a few reports this week that could send mortgage rates up or down a bit. But Friday’s jobs report is the one most likely to have a decisive impact.
The consensus among economists is that the report will show 240,000 new jobs created in June compared with 339,000 in May. Anything lower than 240,000 might see mortgage rates tumble, which would be great.
However, we’ve witnessed economists making similar predictions for employment several times over recent months. And, nearly every time, their forecasts have greatly underestimated the resilience of the American labor market and therefore the American economy.
Of course, they might be right this time. Let’s hope so. But I shouldn’t hold my breath if I were you.
Please read the weekend edition of this daily report for more background on what’s happening to mortgage rates.
Recent trends
According to Freddie Mac’s archives, the weekly all-time low for mortgage rates was set on Jan. 7, 2021, when it stood at 2.65% for conventional, 30-year, fixed-rate mortgages.
Freddie’s Jun. 29 report put that same weekly average at 6.71%, up from the previous week’s 6.67%. But Freddie is almost always out of date by the time it announces its weekly figures.
In November, Freddie stopped including discount points in its forecasts. It has also delayed until later in the day the time at which it publishes its Thursday reports. Andwe now update this section on Fridays.
Expert mortgage rate forecasts
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the current quarter (Q2/23) and the following three quarters (Q3/23, Q4/23 and Q1/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on May 23 and the MBA’s on Jun. 21.
In the past, we included Freddie Mac’s forecasts. But it seems to have given up on publishing those.
Forecaster
Q2/23
Q3/23
Q4/23
Q1/24
Fannie Mae
6.4%
6.2%
6.0%
5.8%
MBA
6.5%
6.2%
5.8%
5.6%
Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Find your lowest rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change, unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
For the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
In fact, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. This gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements, or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders — and it could save you thousands in the long run.
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Unless you come by a huge influx of cash either by winning the lottery or through an inheritance; a mortgage remains the most affordable way to own a home. Among the tools that lenders use to determine your eligibility for a home loan is debt-to-income ratio, or DTI.
The ratio is used to determine how much of your income can go towards monthly mortgage payments as compared to other monthly debts that your income settles. Read on to find out how to calculate DTI and what ranges are desirable according to the industry standards.
What is a Debt-to-income Ratio & How is it Calculated?
A debt-to-income ratio is a number used to measure a person’s ability to manage their debt. This number is calculated using two key pieces of financial information: your debt and your income. By taking your total monthly debt and your total monthly income, which includes any money earned prior to taxes and deductions, you can determine your debt-to-income ratio.
In another example where the total debts are higher than $1,500 and income is still $4,000, you see an increase in the DTI. If you have monthly debt payments equal to $2,000, and your gross monthly income equals $4,000, your debt-to-income ratio will be 50%.
STEP 1. Determine your monthly liabilities. These include:
Monthly Home-related costs – If it is your first mortgage this will be sum of all monthly expenses that go towards paying your rent. It has to be expressed as a monthly amount i.e. if you pay an annual sum then divide it by 12. Similarly if you pay it quarterly, divide by 4. Add in the proposed or expected monthly payment for the mortgage you are considering.
Also included in this will be other housing costs such mortgage insurance, real estate taxes and homeowner’s association payments. In case you are a homeowner in the market for a second mortgage, the monthly payments you make towards your first mortgage will constitute the cost.
Although you could be paying monthly for utilities like power and gas, they are not taken into account in this summation. Same goes for food, health and car insurances, phone bill, your taxes and cable bill.
Monthly loan payments – A sum of all monthly loans that are deducted from your pay and show on your credit report. These include monthly remittances towards car loan, student loan, credit union and personal bank loans.
Monthly credit card payments – This is the sum of minimum payments that you make for each credit card. It excludes credit card debt that you settle monthly in full.
Other monthly obligations – This could be any other line of credit that involves financing. Monthly child support or alimony payments fall under these obligations.
This refers to your total pay before any deductions are made or simply pre-tax pay. This comprises of;
Basic wages or salary.
Bonuses and commissions
Alimony and or child support.
Income from investments (must be verifiable via your tax returns)
Tip: If you draw a salary, bonus or commission annually then divide it by 12 to arrive at its monthly value.
How to Calculate the Front-end Ratio
This is the home-related costs divided by your monthly gross income. It shows the amount of monthly income that can be freed to service the house loan you propose to get. To put this into context, suppose your monthly gross income is $6,000 and total monthly home-related costs are $1,500.
Front-end DTI = ($1500/ $6000) * 100 = 25%
How to Calculate the Back-end ratio
When lenders speak of DTI, this is mostly what they have in mind. It’s a ratio that shows the amount of your income that goes towards settling all your debts. It’s the sum of all monthly debts divided by your monthly gross income. Suppose your total monthly liabilities (including home related costs) in the above example is $2500 then,
Back-end DTI= ($2500/ $6000) *100 = 41%
Standards for Debt-to-income Ratio
A low DTI means that you have more of your income left after paying bills. Back-end ratio of 36% and front-end ratio of 28% or below is considered favorable by most lenders.
Back-end ratios of between 36%-49% translate to less amount left to spend. Lenders will view you as a potential defaulter. You may have to contend with higher interest rates and huge down payments for your loan.
Anything higher than 50% puts you on the red. It means half of your pay is going toward debt payments leaving you with little to spend or even take up a new financial obligation. This greatly reduces your chances of landing a mortgage.
What is the Ideal Debt-to-income Ratio?
If you aren’t thinking about applying for an auto or home loan, opening a credit card account, moving into a new apartment, or doing anything else that requires someone to review your credit and finances, you may not care too much about your DTI. But when you are seeking credit, part of the application process may include a thorough review of your finances. Even though it will vary, every creditor and lender has certain criteria that applicants must meet in order to approve an application, so they might be interested in examining your DTI to determine if you should be approved.
Since this number gives insight into how you manage your debt, specifically your ability to repay your debt, the higher your DTI, the more likely you are to be denied. Creditors will look for borrowers who have a debt-to-income ratio no higher than 43%. This means that if your monthly income is $4,000, your total monthly debt payments should be equal to no more than $1,720. Although 43% is acceptable to most creditors, a lower DTI is even better.
Improving Your Debt-to-income Ratio
If your DTI is above 43%, you have the power to change it. Since your monthly debts and income are the two important factors used to determine your DTI, there are a number of ways you can lower your DTI and get in a better position financially.
If you want to improve your debt-to-income ratio, one thing you can do is reduce the total amount of debt you owe. If you have taken out a loan for $5,000, your monthly loan payment will be included in your debts used to calculate your DTI. By making extra payments on your loan, you will be able to pay off the loan faster and reduce the amount of debt owed.
Additionally, if you want to improve your DTI, you can also avoid adding to your current amount of debt or increase your monthly income by taking on a hiring paying full-time job, part-time job, or gig.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
Even the most aggressive stock market investors keep some cash on the sidelines. That balance helps offset market volatility and cover end-of-year tax payments on capital gains. It’s there when you’re ready to put more money in the market too.
Many brokerages hold cash in basic, boring accounts that pay little or no interest and have no real features of their own. Others, like Fidelity, offer more appealing cash management accounts with much higher yields and checking-like features.
There’s no contest. True cash management accounts are better. And the Fidelity Cash Management account is among the best of the bunch. Even if you’re not a current Fidelity brokerage customer, it’s worth checking out. Just make sure you understand how it works — and its limitations — before you apply.
What Is the Fidelity Cash Management Account?
The Fidelity Cash Management account is an FDIC-insured cash management account with no maintenance fees and competitive interest rates on eligible balances.
You can open a Fidelity cash management account without an existing Fidelity brokerage account. Once open, you can keep the entire balance in cash or use a portion of it to purchase stocks, ETFs, or mutual funds. You don’t need to apply for a separate brokerage account.
Fidelity cash management account balances up to $5 million earn 2.60% APY. Interest is variable above that threshold. Other notable features include a secure debit card compatible with major digital wallets, global ATM fee reimbursement, mobile check deposit, and online bill payments.
Unlike a traditional bank account, funds deposited into the Fidelity cash management account may be distributed among a network of partner banks rather than held with Fidelity. This enables much higher FDIC insurance coverage because more than one FDIC-insured bank is involved. It also offers the possibility (though not the guarantee) of higher yields because each bank sets their own interest rates.
What Sets the Fidelity Cash Management Account Apart?
The Fidelity cash management account stands out for several reasons:
Comes with a Visa debit card that works worldwide. This account comes with a Visa debit card accepted by millions of merchants worldwide. As a payment method, it’s as good as any other Visa debit card or credit card.
No limits or geographical restrictions on ATM reimbursements. Fidelity reimburses ATM fees worldwide. There’s no monetary limit to this privilege either.
FDIC insurance many times the standard limit. Although the exact limit is subject to change based on how Fidelity allocates the funds in your cash management account, Fidelity advertises up to $5 million in FDIC coverage. That’s 20 times the standard limit of $250,000.
Impressive mobile features. This account holds its own against any mobile-friendly checking account. It has a full lineup of mobile features in an easy-to-use app.
Key Features of the Fidelity Cash Management Account
Before you open a Fidelity cash management account, take some time to understand its core features and capabilities.
Account Yield & Requirements
This account yields 2.60% APY on the first $5 million. Fidelity allocates this portion of your balance among its FDIC-insured partner banks, but for all practical purposes, it’s held with Fidelity.
Any portion of your balance above $5 million goes into a Fidelity money market fund, which holds a mix of government securities. The interest rate on this portion is variable but generally lower than the rate on the partner bank portion. Importantly, there’s no FDIC coverage on balances held in money market funds.
Account Fees & Minimums
This account has no monthly or annual maintenance fee. There’s no minimum or ongoing balance requirement either.
Secure Debit Card
This account comes with a secure Visa debit card accepted by millions of merchants worldwide. The card itself has no additional maintenance fee, though fees may apply for foreign transactions or overdrafts.
ATM Access
This account’s debit card works at tens of thousands of machines worldwide: any with the Visa, Plus, or Star logos. Fidelity charges no ATM fees of its own and reimburses any fees charged by third parties, like other banks or ATM owners.
Mobile Features
This account has a user-friendly mobile app and a responsive web interface that works well on small screens. It has a full feature lineup:
Mobile check deposit
Digital bill payments
Digital wallet integration
Real-time spending view
Fast internal and external funds transfers
Deposit Insurance
This account has FDIC insurance on balances up to $5 million. Balances above that amount are held in a money market fund that has no FDIC coverage and can lose value due to market volatility.
Access to Stocks & Other Asset Classes
True to its name, the Fidelity cash management account is first and foremost a cash account. You can use it as you would any other checking account.
But because it’s associated with a major investment company, it’s also easy to use some or all of the balance to fund your investing activities. You can buy stocks, ETFs, and mutual funds directly out of your cash management account balance. If you want to trade in riskier asset types, such as options contracts, you need to apply for those privileges separately.
Pros & Cons
The Fidelity cash management account has plenty of upsides and a few notable downsides too.
Visa debit card accepted worldwide
No limits on ATM fee reimbursements
Lots of checking-like features
Very high FDIC insurance limits
Brokerage account link could be too much temptation
Yield isn’t competitive with the best savings accounts
Some traditional checking features missing
Pros
The Fidelity cash management account is a well-rounded cash account with enough firepower for higher-asset users.
Visa debit card accepted worldwide. This account comes with a Visa debit card that’s accepted by millions of merchants worldwide. Functionally, it’s as good as any checking account debit card.
No limit on ATM fee reimbursements. Fidelity is unusually generous when it comes to ATM fee reimbursements. No matter how many withdrawals you make, Fidelity covers the associated fees.
Lots of checking-like features. This account isn’t quite as good as a checking account, but it’s pretty close, and you might not need a checking account if your financial life is otherwise simple.
Very high FDIC insurance limit. Your Fidelity cash management account balance has FDIC insurance up to $5 million, many times the standard limit and high enough not to be an issue for the vast majority of users.
Integrates seamlessly with Fidelity brokerage account. Your Fidelity cash management account integrates seamlessly with your Fidelity brokerage account. That is, if you want it to. It functions perfectly fine as a standalone cash-only account too.
Cons
The Fidelity cash management account is stingier than some other cash management accounts and could tempt less sophisticated users with potentially risky investments.
Yield can’t match top cash management or savings accounts. Though variable, the Fidelity cash management account’s yield tends lower than the leading high-yield savings accounts and interest checking accounts. If your top priority is to maximize your return on cash balances, this isn’t the best account for you.
Direct access to stocks and ETFs could threaten users’ emergency savings. Traditional checking and savings accounts aren’t linked to online brokerage accounts, which means they don’t carry the temptation to invest FDIC-insured emergency savings (or any other cash balances) in stocks and ETFs that can lose value.
Some missing checking features. This account has important checking features like online billpay and mobile check deposit, but it’s not quite a full-service checking account.
How the Fidelity Cash Management Account Stacks Up
The Fidelity cash management account shares the spotlight with several other high-yield accounts tied to brokerage platforms. One of its top competitors is the Wealthfront Cash Account. Before applying for either, compare them head to head.
Fidelity Cash Management
Wealthfront Cash
Maintenance Fee
$0
$0
Yield
2.60% APY
4.55% APY
ATM Reimbursements
Yes, unlimited
No
FDIC Insurance
Up to $5 million
Up to $5 million
The Fidelity cash management account is clearly better for folks planning to use it more like a checking account, thanks in particular to unlimited ATM fee reimbursements. But Wealthfront has a significantly higher yield, which is a key consideration for many investors.
Final Word
The Fidelity Cash Management account is a checking-like deposit account with a much higher yield than most checking accounts and direct access to a low-cost digital brokerage. It has sky-high FDIC insurance limits and unlimited ATM fee reimbursements too, making it appropriate for high rollers.
It’s not perfect though. Its yield is lower than many competing cash management accounts, not to mention high-yield savings accounts, and it’s not quite a full-service checking account. Before you apply, make sure it’s the best choice for your cash management needs.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
The Verdict
Our rating
Fidelity Cash Management Account
With a strong-but-not-industry-leading yield and very high FDIC insurance coverage, the Fidelity Cash Management account is an ideal place to park money you don’t need right away. It also has enough checking-like features to potentially replace your existing bank account. But it’s not the best option if all you care about is earning the most interest possible.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
When you’re buying a home, you probably have a million questions that need answering, especially when it comes to getting the proper insurance to protect your investment.
Soon-to-be homeowners may see both title and homeowners insurance on the lending documentation and wonder what the difference is between the two. While both types of insurance can provide vital coverage for homeowners, they differ vastly in their purpose and protection.
What Is Homeowners Insurance?
A homeowners insurance policy protects a home and personal property from loss or damage. It may also provide insurance in the event someone is injured while they are on the property.
Here are some common things homeowners insurance may cover:
• Damage that may occur in the home, garage, or other buildings on the property • Damaged, lost, or stolen personal property, such as furniture • Temporary housing expenses if the homeowner must live elsewhere during home repairs
Depending on the policy, homeowners insurance may also cover:
• Physical injury or property damage to others caused by the homeowner’s negligence • An accident that happens at home, or away from home, for which the homeowner is responsible • Injuries that take place in or around the home and involve any person who is not a family member of the homeowner • Damage or loss of personal property in storage
Some coverage may also apply to lost or stolen money, jewelry, gold, or stamp and coin collections.
Buying Homeowners Insurance
While someone can legally own a home without taking out homeowners insurance, the mortgage loan holder may require the homeowner to purchase an insurance policy. Typically, lenders do require this as a condition of the home loan.
It’s important to understand that homeowners need to insure the home but not the land underneath it. Some natural disasters — tornadoes and lightning, for example — are covered by typical homeowners policies. Floods and earthquakes, however, are not. If you live in an area where floods or earthquakes are common, you may want to consider purchasing extra insurance to cover damages from potential disasters.
Special coverage may also be worthwhile for those who own valuable art, jewelry, computers, or antiques. There are two policy options that can help homeowners replace insured property in the event of damage or a loss. Replacement cost coverage covers the cost to rebuild the home and replace any of its contents, while actual cash value simply pays the current value of the property at the time of experienced loss.
When it comes time to shop for and buy homeowners insurance, start by asking trusted friends, family, or financial advisors for their recommendations. Do some online research, too. Before you make a final decision, contact multiple companies and request quotes in writing to compare their offerings. That process can give you a good idea of who is offering the best coverage for the most affordable price.
Recommended: Is Homeowners Insurance Required to Buy a Home?
What Is Title Insurance?
Title insurance provides protection against losses and hidden costs that may occur if the title to a property has defects such as encumbrances, liens, or any defects unknown when the title policy was first issued.
The insurer is responsible for reimbursing either the homeowner or the lender for any losses the policy covers, as well as any related legal expenses.
Title insurance can protect both the homeowner and lender if the title of the property is challenged. If there is an alleged title defect, which the homeowner may be unaware of at the time of purchase, title insurance can provide protection to cover any losses resulting from a covered claim.
The policy will cover legal fees incurred if there is a claim against the property.
Recommended: How to Read a Preliminary Title Report
Buying Title Insurance
Both home buyers and lenders can purchase title insurance. If the home buyer is the purchaser, they may want to insure the full value of the property. (The value of the property will affect how much the policy costs). When the lender is the purchaser, they typically only cover the amount of the homeowner’s loan. When it comes time for a home buyer to purchase title insurance, they have full choice of the insurer.
According to the Real Estate Settlement Procedures Act (RESPA) of 1974, the seller cannot require the home buyer to purchase title insurance from one certain company.
Lenders are required to provide a list of local companies that provide closing services, of which title insurance is just one. But it may be worth doing independent research. Lenders may not select their recommendations based on the home buyer’s best interest, but instead because a service provider is an affiliate of the lender and provides a financial incentive in exchange for a recommendation.
Again, it’s a smart idea to seek the counsel of friends and family and do online research to uncover competitive prices and learn which service providers have a solid reputation.
Recommended: What Are the Different Types of Mortgage Lenders?
The Takeaway
Homeowners insurance is an ongoing cost (billed monthly, quarterly, or annually) that helps cover damage or loss of the home and possessions within the home. Title insurance, on the other hand, can help protect against losses caused by defects in the title and is a one-time fee payable during the closing process. The advantage to having both types of coverage is that each policy can protect homeowners against financial loss in very different circumstances.
Shopping for homeowners insurance often requires considering several options, from the amount of coverage to the kind of policy to the cost of the premium. To help simplify the process, SoFi has partnered with Lemonade to bring customizable and affordable homeowners insurance to our members.
Lemonade is a name you can trust. It has exceptional ratings, is fully licensed, and reinsured by some of the most trusted names on the planet. Plus, it donates any leftover money to nonprofit partners chosen by customers.
Check out homeowners insurance options offered through SoFi Protect.
SoFi offers customers the opportunity to reach the following Insurance Agents:
Home & Renters: Lemonade Insurance Agency (LIA) is acting as the agent of Lemonade Insurance Company in selling this insurance policy, in which it receives compensation based on the premiums for the insurance policies it sells.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
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.
During the apartment application process, landlords ask potential renters to provide a lot of information about themselves. Some are simple like your name and phone number, while others are more personal like your income. But before accepting you as a tenant, landlords need to ensure that all the things you said about yourself are accurate and truthful. That’s where background checks come in.
With your permission, landlords can run background checks on you to verify all the information you provided. After all, landlords want trustworthy and reliable tenants, so they need to do their due diligence. A housing provider’s substantial examination of your past with an apartment background check looks for any red flags or anything they need to worry about. But what are they looking for exactly?
What shows up on a background check?
In a nutshell, a background check shows some or all of the details of your personal, financial and professional background. Taken all together, they help paint a more detailed, complete picture of you for the landlord.
The top reasons why landlords run a background check for apartment applicants
Having a stranger look into your personal history can feel invasive. But if you know what information they’re looking at, it helps ease worries. Here’s everything that a future landlord looks at while running a background check.
1. Confirming personal information and identity
Landlords want to protect their rental properties, and that calls for accepting honest tenants. They need to know that you are who you say you are, so the background check validates your name, address, age and other identifying facts.
2. Confirming past and present addresses
On your application form, you’ll usually need to list your previous address history. During the background check process, landlords verify that you indeed lived at those previous addresses.
3. Criminal history and criminal record
No one wants someone who is potentially dangerous or involved in illegal activity living in their apartment rental. Not only does it put other tenants living in the same place at risk, but it could open the landlord up to litigation if something happens.
That’s why many landlords and property managers conduct a criminal background check to screen for a felony record or prior arrests. These types of checks look through police records across the country, uncovering pending criminal cases, prior arrests and criminal convictions.
Having a conviction on your record is more serious than having an arrest because you weren’t or haven’t been charged with any crimes. Arrests are usually scrubbed from your record after seven years, but convictions stay on your record permanently. That being said, having a ton of arrests credited to you wouldn’t look great either.
4. Sex offense registry
As part of the criminal background screening, landlords in some states may check if you pop up on any sex offender lists. If you are a convicted sex offender, you could be denied on these grounds in some states according to state laws. But others don’t allow landlords to discriminate against potential applicants based on this type of offense.
5. Employment history
Along with your personal information and criminal background, your employment history is one of the most important parts of your background check. On your rental application, you’ll be asked to list your current and at least one previous employer, as well as your position and how long you’ve been with the company.
Landlords verify and confirm all this information while running background checks, often by calling or contacting your employer directly.
6. Income
When submitting your application, you’ll need to include pay stubs or other proof of steady income so the landlord knows you can comfortably afford the monthly rent. As part of the employment history check, landlords confirm that you make as much money as you stated on the application by checking with your employer.
It’s also not enough to make roughly the same amount of money each month as the cost of the rent. Landlords know that you have other expenses like utilities and food, so they need to ensure you make enough to comfortably afford all essentials. Having a monthly income three times the cost of rent is the norm.
7. Renter history
Landlords want a stable renter with good rental history. When they check your rental background, the key areas they’ll look into are your payment history and if you’ve had any issues with previous landlords. They can see if you pay rent on time and if you have any previous evictions.
Late rental payments or being evicted by a previous landlord are big red flags that could result in your application being thrown out.
8. Contact information for previous landlords
As part of the rental history report, contact information for past landlords or property managers may come up. Former landlords serve as great references for you as a tenant. As an extra precaution, you could get asked to list the name, phone number or email of your former landlords so the property manager can get in touch.
If you have no renter history and this is your first time trying to rent an apartment, you can still be considered based on other criteria.
9. Credit report
A standard background check will not include your credit score and credit report, as that is information the landlord needs to specifically request from one of the main credit-reporting agencies. But some details of your financial history can show up on a general background check.
If a landlord wants to know more specifics about your financial history such as what your credit score is or if you have any outstanding debts, they’ll need to request a separate credit check for that information.
How far back does the background check go?
An apartment background check typically looks back at the last seven years of your life, but some landlords may go back as far as 10 years.
The reason for this is that under the Fair Credit Reporting Act, you can access a criminal record for up to seven years. However, you can search for convictions indefinitely and they are a part of your permanent criminal history.
What information do I need to provide for the background check?
Landlords use your Social Security number to access your background information as it’s the one piece of personal data that remains constant your entire life. Addresses can come and go, and you get new phone numbers. Even names get changed. But your Social Security number stays with you for life. That’s why it’s the most critical piece of personal information a potential landlord needs to run accurate and comprehensive apartment background checks.
Do I need to pay for my rental background check?
Nearly all landlords and property managers include an application fee as part of their apartment application process. The application fee covers the background check cost, as well as the cost of running a credit report.
These fees typically run between $25 to $50, but they can go higher and be upwards of $100.
Can I refuse to authorize a background check?
All rental applications should include a section where you can authorize having a background check performed on you during the tenant screening process. You are within your right to not sign and refuse to authorize a background check.
But that also means landlords are within their right to reject your application. Renters with a criminal history aren’t protected under the Fair Housing Act. This leaves the door open for landlords to discriminate or reject your application since they can’t legally look into your background. However, a growing number of cities like Seattle and San Francisco are banning landlords from running a criminal background check. Staying well-versed in the local laws for tenants and landlords in your area helps you know your rights.
Is there anything I can do to improve my rental background check?
All potential tenants want to look as good as possible on their background and rental application to stand out from the crowd. But at the same time, no one is perfect. Everyone makes mistakes and there are hiccups on your background check reflecting that. You may have bad credit. Maybe you’re temporarily out of work due to an unexpected event or sudden job loss.
But having one or two less-than-stellar components of your background check doesn’t necessarily disqualify you from being considered. If you have bad credit or a felony record, be upfront about it with the landlord or answer truthfully if the landlord asks. This reflects well on you, showing that you’re honest and direct about past mistakes. Even if you do have a bad credit history, criminal convictions or are looking for a new job, landlords can still consider you for the rental property if they understand the extenuating circumstances.
Other than that, improving your background check is all about playing the long game. You want to show a property manager good patterns over time, like holding down jobs or raising your credit score through thoughtful spending. Being a good tenant, paying rent on time and maintaining a good relationship with your landlord or property manager will elevate a subpar rental history. Being a responsible person in all areas of life can help you land a great apartment.
Landlords cannot reject your application based on these factors
During this process, it can feel like landlords get pretty personal based on all the sensitive information they collect from you. But there are limits to what information they can gather. They need to have a nondiscriminatory interest in all potential applicants, meaning they can’t reject someone simply because of prejudice. Under both federal and state laws like the Fair Housing Act, landlords can’t deny or exclude persons based on any of the following:
Race or ethnicity
Gender
Skin color
Religion
National origin/Ethnic background
Disability
Background checks help landlords find the best tenants for their properties
Background checks are sometimes a frustrating part of the rental process, especially if yours isn’t perfect. But landlords need to protect their property and create a safe living environment for all their tenants.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
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.
Primary Residential Mortgage, Inc., or PRMI for short, is a direct mortgage lender based out of Salt Lake City, Utah that has been around since 1998.
Since that time, they have grown into a multi-billion-dollar mortgage originator with over 250 branches and more than 1,800 employees nationwide.
At the moment, they are licensed to lend in 49 states (New York being the exception), and while they originate lots of home loans in many states, their highest volume comes from Florida and Maryland.
They do mostly home purchase loans (~70% share) thanks to their many relationships with real estate agents, but also a good deal of refinance loans as well.
Additionally, they offer a $5,000 Loan Closing Guarantee, whereby they’ll pay you $2,500 and the seller $2,500 if they issue a mortgage pre-approval and don’t close on time.
Let’s learn more about what PRMI offers and if they’re the right mortgage lender for you.
Primary Residential Mortgage Fast Facts
Direct-to-consumer mortgage lender located in Salt Lake City, Utah
Founded in 1998 by Dave Zitting, Jeff Zitting, and Steve Chapman
Licensed to originate mortgages in 49 states
Over 250 branches and more than 1,800 employees
Funded $6+ billion in home loans during 2019 (top-50 lender nationally)
Florida and Maryland are their top two states by loan volume
Also operate a wholesale lending division for mortgage broker partners
Getting a Home Loan with Primary Residential Mortgage
You can apply for a home loan directly from their website in minutes
Their digital mortgage application known as ClickApproval is powered by fintech company Blend
Allows you to securely upload documents and track loan progress from any device
Can also visit one of 250 local branches or work with a loan officer over the phone
Primary Residential Mortgage has a digital mortgage application powered by Blend. This makes it simple to apply for a home loan in minutes.
In order to get to the application, you’ll first need to find a loan advisor to work with.
You can do this by visiting their website, clicking on “Get a Loan,” then using the loan advisor search engine to find someone specific or close by.
If you’ve been referred to someone, simply enter their name in the search box.
Once you do that, you can visit that loan officer’s personal website, call or email them, or simply hit the “Apply Now” button to get going on your application.
Their streamlined digital mortgage application process is known as “ClickApproval,” which as the name implies allows you to quickly click your way through the thing.
You can securely upload important documents and/or link financial accounts, check loan status, see what conditions need to be met, and get in contact with your loan team at any time.
In short, PRMI wants to make it easier to get a mortgage by leveraging available technologies, but also keeps the human element alive with their many local branches.
Loan Types Offered by Primary Residential Mortgage
Home purchase, new construction, renovation, and refinance
Conventional loans and government-backed mortgages
Jumbo loans up to $2.5 million loan amounts
Reverse mortgages
Home Equity Lines of Credit (HELOCs)
Down payment assistance via Chenoa Fund
FHA 203k Dream Loans and FHA 203(h) Disaster Relief Loans
FHA Solar and Wind Select Program
One-Time Close Construction Loans
Manufactured Home Loans
Fresh Start program for those with a past bankruptcy, short sale, or foreclosure
ARMs and fixed-rate mortgages with a variety of loan terms
Primary Residential Mortgage offers a ton of different loan programs (they say over 300) to suit just about any home buyer or existing homeowner’s needs.
Whether it’s a home purchase, the refinance of an existing mortgage, a home renovation, or a new home construction, they’ve got you covered.
PRMI provides financing on primary residences, second homes, and investment properties.
They offer conventional home loans, jumbo loans, government-backed loans like FHA/USDA/VA loans, and even “Fresh Start” loans for those with blemished credit history.
Those financing a manufactured home can also take advantage of PRMI’s vast array of loan options, and the same goes for so-called “unique home buyers,” whether you’re self-employed or experienced a past short sale or foreclosure.
They also offer down payment assistance via Chenoa Fund, special FHA financing for solar and wind energy upgrades, and much more.
You can get a fixed-rate mortgage with the term of your choice, ranging from 10 years to 30, or an adjustable-rate mortgage, such as a 5/1 ARM or 7/1 ARM.
Primary Residential Mortgage Rates
PRMI doesn’t advertise their mortgage rates on their website. So if you want to know about rates and pricing, you either have to call a loan advisor for a quote or fill out an application.
From there, you’ll be able to compare pricing and see where they stand relative to other lenders out there.
This is a slight negative seeing that there are plenty of lenders that openly advertise their mortgage rates on their websites.
However, it doesn’t mean their pricing is necessarily good or bad.
The same goes for lender fees PRMI may charge. Since they don’t list these fees on their website, you’ll need to inquire about fees such as loan origination, underwriting, processing, application fee, and so on.
Take the time to compare rates and costs to other mortgage companies if you’re looking for the best deal on your home loan.
Primary Residential Mortgage Reviews
On Zillow, they have roughly 5,000 customer reviews and a whopping 4.98-star rating out of 5, which is very close to perfection.
Many of the reviews say the interest rate was lower than expected, which is a good sign if you’re looking for a competitive price.
Be sure to drill down deeper and look at individual loan officer reviews on Zillow for PRMI, assuming your LO has enough reviews to be assigned their own page.
That way you’ll be able to see how a specific LO has performed in the past, as opposed to just looking at the company’s overall rating.
Because they’re such a large company, experiences will likely vary, so knowing how one individual has performed might be more worthwhile.
On SocialSurvey, they have a similarly excellent rating of 4.90 out of 5 stars based on more than 57,000 reviews.
In other words, people seem to like them, and they have a ton of reviews to back up that argument.
While they aren’t an accredited business with the Better Business Bureau, they do have an A+ BBB rating, meaning they likely have few customer complaints and resolve any that do get lodged against them.
Primary Residential Mortgage Pros and Cons
The Good
Licensed to lend in 49 states
Digital mortgage application
Can apply directly from their website or a mobile device
Loan Closing Guarantee
Thousands of excellent reviews from past customers
Mortgage watchers expect rates to trend down by the end of the year. Will that long-awaited decline begin this month?
May mortgage rate predictions
Mortgage rates are likely to remain volatile this month. While most forecasters call for them to ease below 6 percent later this year, that prediction assumes the Federal Reserve’s war on inflation will continue to bear fruit.
“It’s hard to know exactly where rates will go because there are a lot of mixed signals in the economy,” says Lisa Sturtevant, chief economist at Bright MLS, a multiple listing service operating in the Mid-Atlantic.
The first market-moving event on the calendar comes May 3, when the Fed unveils its latest position on interest rates. Many expect a 0.25 percentage point increase, following an identical boost at the central bank’s March 22 meeting.
While the Fed doesn’t dictate mortgage rates, the central bank’s policies ripple through the mortgage market. Since early 2022, mortgage rates have been driven by inflation — and by how aggressively the Fed has responded to rein it in.
If the Fed looks to be moving to the sidelines after an early May rate hike and we continue to see moderating inflation pressures, mortgage rates could slide back to the low 6s.
— Greg McBride, Bankrate Chief Financial Analyst
Many view the central bank’s actions as the clearest indicator of the direction of mortgage rates.
“It all depends on the Fed,” says Doug Duncan, chief economist at mortgage giant Fannie Mae.
“If the Fed looks to be moving to the sidelines after an early May rate hike and we continue to see moderating inflation pressures, mortgage rates could slide back to the low 6s, a level not seen since September,” says Greg McBride, chief financial analyst for Bankrate.
The Mortgage Bankers Association predicts rates will fall to 5.5 percent by the end of 2023 as the economy weakens. The group revised its forecast upward a bit — it previously expected rates to fall to 5.3 percent.
Meanwhile, Fannie Mae’s Duncan expects rates to be in the “high 5s” by the end of 2023. He bases that forecast on the assumption the central bank won’t cut rates in 2023.
What’s driving mortgage rates this month
Mortgage rates bounced around in April, frustrating homebuyers who hoped to make a deal during the spring selling season.
The 30-year fixed rate climbed from 6.32 percent the week of April 5 to 6.61 percent the week of April 19, according to Bankrate’s national survey of lenders. Then they retreated to 6.48 percent in Bankrate’s April 26 survey.
Rates fell in part because the banking industry’s woes were back in the headlines. In late April, fresh concerns about the financial sector spurred a flight to safety by investors. As a result, 10-year Treasury yields dipped. The 10-year Treasury is the benchmark most closely tied to 30-year mortgage rates.
The new worries echoed the March banking crisis, although not as loudly. Mortgage rates fell sharply after Silicon Valley Bank and Signature Bank failed, March 10 and March 12, respectively.
Inflation, too, has been a hallmark of the U.S. economy’s strong rebound from the pandemic recession of 2020. Nearly everyone expected the economy to fall into a recession in late 2022 or early 2023, but that hasn’t happened, at least not yet.
“With first-quarter GDP numbers showing a slowing economy, recession fears have been boosted, which could mean that we will see mortgage rates edge lower in the months ahead,” says Sturtevant. “Mortgage rates typically fall during recessionary periods.”
Political bickering — in the form of a partisan standoff over the federal budget — could also affect mortgage rates.
“The debt ceiling is the ultimate wild card, and markets will get very nervous very fast as the deadline approaches,” says McBride.
Another factor to consider is the “the spread,” the gap between 10-year Treasury yields and 30-year mortgage rates. That margin has been unusually high for the past year or so.
“If that gap were to narrow, mortgage rates could decline,” says Sturtevant.
Mortgage rates and homebuying season
The spring homebuying season is officially underway, and these are nervous times for buyers. Home prices remain elevated, and mortgage rates have fluctuated day to day.
“Even if rates do come down, we’re not going to see the sub-3 percent rates we had during the pandemic,” says Sturtevant, “and the decline in rates is not going to solve the housing affordability challenge which has gotten persistently worse, particularly for first-time homebuyers. In markets with extremely low inventory, lower rates could actually exacerbate the housing affordability crunch if they bring more prospective buyers into an already competitive market.”
Today we’ll check out SWBC Mortgage, short for Southwest Business Corporation.
They’re a Texas-based direct-to-consumer mortgage lender, which is part of a larger diversified financial services company called, you guessed it, SWBC.
Their claim to fame is being a top company to work for, and they boast that many of their loan officers have made the list of top 1% of mortgage originators in America.
They currently offer home loans in 40 states and the District of Columbia. Let’s learn more about them.
SWBC Mortgage Quick Facts
Direct-to-consumer retail mortgage lender founded in 1988
Headquartered in San Antonio, Texas
Funded nearly $4 billion in home loans during 2019
More than a quarter of total loan volume came from home state of Texas
Have branch locations in many states across the country
Licensed in 40 states and D.C.
All loan processing, underwriting, and closing is done in-house
Last year, SWBC Mortgage originated roughly $4 billion home loans via the retail channel.
They allow prospective home buyers and existing homeowners to apply via their website or a brick-and-mortar branch.
A good chunk of their total loan volume comes from their home state of Texas, and they also do quite a bit of lending in Colorado, Tennessee, and many Southern states.
About two-thirds of total production came from home purchase lending, with about a quarter refinance business and the remainder powered by home equity lending (HELOCs).
At the moment, they don’t appear to provide mortgage lending services in the states of Hawaii, Maine, Massachusetts, Missouri, New York, North Dakota, Rhode Island, South Dakota, Vermont, or Wyoming.
Getting a Home Loan with SWBC Mortgage
You can apply directly from their website in minutes
Digital mortgage application known as TurnKey powered by Blend
Can link financial accounts and/or scan and upload documents securely
They say they’re generally able to close loans in less than 3 weeks
When it comes time to apply for a mortgage, you can do so directly from the SWBC website. They have a digital mortgage application called “TurnKey” powered by fintech company Blend.
As the name suggests, you can quickly get through the application thanks to technology like income and asset validation, which lets you link financial accounts instead of inputting that information manually.
At the same time, you can expect one-on-one customer service from a dedicated loan officer if you need any help along the way.
To that end, you can choose a loan officer to work with before you apply by using the directory on the SWBC Mortgage website.
Simply click on “Find a Pro,” then search by city, state or zip code, or by loan officer name. Once you find a branch, you can see who works in that office.
And once you’ve got your loan officer picked out, you can contact them directly or apply from their own dedicated webpage.
All in all, SWBC Mortgage makes it super easy to apply for a home loan without needless steps and wasted time. But you also get the human touch if and when you want/need it.
Loan Types Offered by SWBC Mortgage
Home purchase and refinance loans
Conforming mortgages backed by Fannie/Freddie
Government-backed loans: FHA, USDA, and VA
Jumbo loans up to $3 million loan amounts
Home renovation loans: Fannie Mae HomeStyle and FHA 203k (Standard and Limited)
Texas Vet Mortgage Loans
SWBC Mortgage offers both home purchase financing and refinance loans, including rate and term and cash out refinances, along with home renovation loans.
You can finance a primary residence, second home, or multi-unit investment property.
They’ve got all the typical loan types, such as conforming loans backed by Fannie Mae and Freddie Mac, as well as government loans like FHA loans, USDA loans, and VA loans, the latter two allowing zero down financing.
They also offer home equity loans by way of HELOCs, so if you want to tap your home equity while leaving your first mortgage intact, you can do so.
It may also be possible to take out a piggyback second mortgage if you want to extend your home purchase financing while avoiding PMI.
If you have a particularly expensive property, they offer jumbo home loan financing as high as $3 million, with some of their jumbos coming with down payment options of just 10%.
They also have options for self-employed borrowers, and low down payment options (3% down) for those with little set aside in the way of assets.
Lastly, because SWBC Mortgage participates in the Veterans Housing Assistance Program (VHAP), they’re able to offer Texas Vet mortgage loans that come with special interest rate discounts.
In terms of loan program, you can get a fixed-rate mortgage, such as a 30-year or 15-year fixed, or an adjustable-rate mortgage, like a 5/1 ARM or 7/1 ARM.
SWBC Mortgage Rates
SBMC does not advertise or disclose its mortgage rates online or elsewhere to my knowledge. If you want to get pricing, you’ll need to apply and/or speak with a loan officer.
As such, it’s unclear how competitive they are relative to other mortgage lenders. The same goes for lender fees, which don’t appear to be posted on their website.
This isn’t necessarily a bad sign, it just means you’ll need to speak to someone to find those things out.
Once you have that important pricing information, you can compare their interest rates and closing costs to other lenders while comparison shopping.
Yes, you should take the time to gather more than one mortgage quote, otherwise you’re doing yourself a disservice.
SWBC Mortgage Reviews
SWBC says it has over 1,000 Google reviews, with an average customer rating of 4.9 out of 5 stars. Those reviews may be spread across their many branch locations, so be sure to filter by location.
Some of their locations are very highly-rated, such as the Oklahoma City branch, which has a 5-star rating out of 5 on Birdeye based on nearly 250 reviews.
You can also see individual SWBC Mortgage loan officers’ reviews on Zillow – some have more than others, but this is perhaps the best way to drill down and see how one person performs as opposed to just looking at the entire company.
Since they’re large and located across the United States, it may be best to look at individual reviews for an indication of future performance.
SWBC Mortgage is an accredited company with the Better Business Bureau, and currently enjoys an A+ rating.
SWBC Mortgage Pros and Cons
The Good
Can apply for a home loan directly from their website in minutes
Offer a digital mortgage application powered by Blend
Plenty of loan options to choose from including home equity products
Americans believe they will need $1.27 million to retire comfortably, according to the latest set of findings from Northwestern Mutual’s 2023 Planning & Progress Study. That number continues to increase, up from $1.25 million reported last year. High-net-worth individuals – those with more than $1 million in investable assets – believe they’ll need $3 million to retire comfortably.
Consider working with a financial advisor as you plan your retirement.
Most workers have got a ways to go with their savings, the report finds. On average, Americans have set aside $89,300 of the $1.27 million they think they’ll need. That average ranges from slightly less than $36,000 in retirement savings for those in their 20s, to nearly $114,000 for people in their 70s – leaving them far off from their required savings goals.
A Positive Development
However, even in the face of a 20% loss in stocks during 2022 and soaring inflation, workers still managed to increase the average retirement savings balance by 3% from the 2022 average of $86,869.
“The good news is that they are saving and investing more for tomorrow, even in this time of high inflation and market volatility,” said Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual. “That is a step in the right direction and a reverse of what we saw last year when the gap widened rather than narrowed. The challenging news is that there continues to be a big disparity between what they think they’ll need to retire and what they’ve saved to date.”
The study found that people in their 20s had saved an average of $35,800 for retirement. To hit the $1.27 million goal, someone 25 years old with that starting balance would need to invest about $306 per month for the next 40 years at an annual return of 7%. Someone 35, with the average current balance of $67,400 would need to save about $668 a month for the 30 years until they near retirement.
A 45-year-old with the average $77,400 in savings, with just 20 years to save, requires monthly savings of $1,973 per month. At 55, with a current retirement asset balance of $110,900 and 10 years until they near retirement, a worker would need to sock away the unlikely total of $6,344 per month.
Expectations as Retirement Nears
On average, the study found that 52% of people say they expect to be financially prepared for retirement when the time comes, with Gen Z coming in the most optimistic, at 65%. Gen Xers are the least optimistic, with just 45% saying they expect to be ready. Millennials are right in the middle at 54%, while 52% of Baby Boomers who have yet to retire think they’ll be financially set to retire.
The study also found that, on average, Americans expect to work a bit longer before they can call it quits than they did in previous surveys. Currently, they expect to work until age 65, up from 64 last year and 62.6 in 2021. The full retirement age for Social Security benefits is 67 years old for anyone born in or after 1960.
When it comes to feeling ready for retirement, the study found that creating a well thought-out financial plan brought a real boost of confidence. Survey respondents who described themselves as disciplined financial planners knocked two years off their retirement age, expecting to quit at 63, while people who described their planning as informal or having no plan figured they’d be retiring at age 67.
Bottom Line
Finding the answer to the question, “What’s your number?” is an essential piece of financial planning, so that investors can understand the amount of appropriate risk necessary to meet their investment and retirement goals. Typically, experts recommend saving 10% or 15% of salary for the bulk of your working years. Workers also can consult their own Social Security estimate to get a full picture of their potential retirement income.
Tips on Retirement
While many investors obsess about trying to “beat the market,” smart investors understand that they simply need to meet their own periodic goals to “make their number” – their desired total retirement assets before they leave work. One way to get help figuring out your number is to work with a financial advisor who can help you answer all your questions about retirement options. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Fidelity recommends that you have 10 times your annual income saved for retirement by age 67. To find out if you’re on track, try SmartAsset’s retirement calculator. This free tool will estimate how much you’ll have when the time comes to retire.