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When it comes to purchasing a home, buyers may find it difficult to find financing beyond the conforming loan limit. In this instance, you may need to apply for a jumbo loan. Whether your sights are set on a riverfront condo in Minneapolis or a home in St. Paul, join us as we break down what a jumbo loan is in Minnesota, the 2023 conforming loan limits, and what’s needed to qualify for this type of loan.

What is a jumbo loan?

In Minnesota, a jumbo loan is a type of mortgage used to finance a property that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Jumbo loans are typically necessary for expensive homes or properties in high-priced housing markets. These loans are specialized and designed to accommodate larger amounts of borrowing for upscale and luxurious properties.

If the home you’re purchasing will require you to borrow more than the conforming loan limit (CLL), you’ll need to apply for a jumbo loan. It’s important for homebuyers to understand the requirements and implications of obtaining a jumbo loan in Minnesota. For instance, borrowers typically need a higher credit score and a larger down payment to qualify for a jumbo loan.

What is the jumbo loan limit in Minnesota?

In Minnesota, the conforming loan limit is $726,200 across all counties. For example, the conforming loan limit in Hennepin County is $726,200, so any mortgage that surpasses the loan limit designated for your county by even one dollar is classified as a jumbo loan.

Keep in mind that the amount being borrowed is what determines whether or not you’ll need a jumbo loan, not the price of the home. So, if you were to put $100,000 down on a $780,000 home in Bloomington, the loan would be $680,000, which is under the conforming loan limit for this area. In this case, you would not need a jumbo loan.

You can find more information on the conforming loan limits specific to where you’re looking to buy a home in Minnesota by using the FHFA map. 

What are the requirements for a jumbo loan in Minnesota?

The requirements to qualify for a jumbo loan are more stringent than the requirements for a conforming loan. Each lender may have different requirements or processes, but below are the typical requirements for borrowers seeking a jumbo loan.

Higher credit score: To qualify for a jumbo mortgage, borrowers typically need to have a credit score of at least 720. However, some lenders may be willing to accept scores as low as 660, although less frequently. A higher credit score demonstrates a borrower’s ability to manage credit responsibly and is a crucial factor that lenders evaluate when reviewing jumbo loan applications.

Larger down payment: When applying for a jumbo loan, keep in mind that down payment requirements are generally more substantial than for conventional loans. While the specific amount will depend on the lender and the borrower’s financial situation, many jumbo loan lenders require a down payment of at least 10%, and some require as much as 20% or more.

More assets: Jumbo loan borrowers are typically required to have additional assets. In particular, lenders may require borrowers to demonstrate sufficient liquid assets or savings to cover one year’s worth of loan payments.

Lower debt-to-income ratio (DTI): When applying for any type of mortgage, lenders evaluate your spending habits and creditworthiness by analyzing your debt-to-income ratio (DTI). The DTI is determined by dividing the total of your monthly debt payments by your gross monthly income. While some lenders may accept a DTI as high as 50% for a conforming loan, those applying for a jumbo mortgage should aim for a DTI under 43% and ideally closer to 36%.

Additional home appraisals: For a jumbo loan, a mortgage lender may require a second appraisal to ensure that the property’s value is accurate. This is particularly true in places where there are few comparable property sales. The second appraisal acts as a second opinion and helps the mortgage lender to mitigate their risk. It’s important to note that the cost of a second appraisal may be higher than a typical home appraisal, particularly in areas with fewer sales.

Source: redfin.com

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For many individuals and families, owning a home is a lifelong dream. However, with rising real estate prices, some may find themselves seeking financing beyond the conforming loan limit. In this instance, you’d need to apply for a jumbo loan.

What is a jumbo loan?

So, what exactly is a jumbo loan in Rhode Island? It’s a mortgage loan that allows homebuyers to finance a property that exceeds the conforming loan limit set by the FHFA. In simpler terms, a jumbo loan is a specialized mortgage that enables you to borrow more money than you would be able to with a conventional loan. These loans are typically used to finance high-end or luxury properties in areas with high home prices, like Newport.

If you’re considering purchasing a home that requires financing beyond the conforming loan limit (CLL), then you’ll need to apply for a jumbo loan. Because of the larger loan amounts, jumbo loans typically carry stricter requirements and higher interest rates than conforming loans. Lenders may require a higher down payment, a lower debt-to-income ratio, and a stronger credit score to qualify for a jumbo loan in Rhode Island.

What is the jumbo loan limit in Rhode Island?

In Rhode Island, the conforming loan limit is $726,200 across all counties. For example, the conforming loan limit in Providence County is $726,200, so if the loan amount needed is even one dollar more than this amount, it’s considered a jumbo loan.

Keep in mind that the loan amount is what determines whether or not you’ll need a jumbo loan, not the home price. So, if you were to put $100,000 down on a $780,000 home in Providence County, the loan would be $680,000, which is under the conforming loan limit for this area. In this case, your loan wouldn’t be considered a jumbo loan.

To identify the conforming loan limits where you’re considering buying a home in Rhode Island, check out this FHFA map.

What are the requirements for a jumbo loan in Rhode Island?

As previously mentioned, the requirements for a jumbo loan are much more stringent than a conforming loan. Each lender may have different requirements or processes, but below are the typical requirements for borrowers seeking a jumbo loan.

Higher credit score: In order to qualify for a jumbo loan, most lenders will require a credit score of 720 or higher. While some lenders may be more lenient and accept a score as low as 660, a score below this threshold is generally not accepted. In contrast, a credit score as low as 620 could suffice for a conforming loan with some lenders.

Larger down payment: Jumbo loans typically require larger down payments than conventional loans. While the exact amount varies depending on the lender and the borrower’s financial situation, down payment requirements for jumbo loans can be as high as 20% or more. That said, some lenders may offer jumbo loans with down payments as low as 10%, provided the borrower meets certain credit and income requirements.

More assets: To qualify for a jumbo loan, lenders require borrowers to demonstrate that they have sufficient liquid assets or savings to cover at least one year of loan payments. The exact amount of assets needed can vary depending on the lender and the size of the loan, but having more assets can increase the chances of approval and potentially lead to better terms and interest rates.

Lower debt-to-income ratio (DTI): Mortgage lenders typically require a debt-to-income ratio (DTI) of under 43% for jumbo loan borrowers, although a DTI closer to 36% is preferred. This ratio is calculated by dividing the sum of all monthly debt payments by the borrower’s gross monthly income. A lower DTI indicates a stronger ability to repay the loan and can help applicants secure more favorable terms and rates. It’s important for Rhode Island borrowers seeking a jumbo mortgage to have a clear understanding of their DTI and take steps to improve it if necessary.

Additional home appraisals: A home appraisal is required whenever a homebuyer receives financing for their home purchase. However, for jumbo loans, lenders may require an additional appraisal. In areas with limited comparable property sales, this appraisal can be more expensive than in places with higher sales rates.

Source: redfin.com

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The Supreme Court has blocked President Joe Biden’s student loan debt relief plan, saying his administration lacked authorization under the HEROES Act to forgive up to $20,000 in student debt per borrower.

Some 43 million borrowers won’t see a cent of the debt cancellation promised by the White House last year. Under current guidance from the Education Department, borrowers must get ready to resume student loan payments starting in October on their full student loan balance.

On Friday afternoon, Biden announced that his administration was pursuing a student debt cancellation plan B. This route leans on a different legal avenue than the one struck down by the Supreme Court, and the process could take a year or longer. But a plan B remains far from guaranteed, and there is no timeline yet. Take steps to prepare for repayment now.

“Now that we have the decision, we can move forward,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors. “There are a lot of borrowers who have been in limbo waiting to see what was going to happen.”

What did the Supreme Court decide?

The court ruled in two cases, and struck down the cancellation through the second case. All nine justices unanimously dismissed the first case, Department of Education v. Brown, because they found the plaintiffs had no standing to sue since they “fail to establish that any injury they suffer from not having their loans forgiven is fairly traceable to the Plan.” The two plaintiffs — individuals who claim they weren’t eligible for part or all of the relief — said they were harmed by not having the opportunity to participate in a notice-and-comment period for the program.

In the second case, Biden v. Nebraska, the court found that at least one plaintiff, the state of Missouri, had the right to sue. Six states sued jointly — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — alleging the relief would harm tax revenue in those states in addition to the finances of certain state-based loan agencies.

With standing established, a 6-3 majority of justices declared that Biden’s student debt cancellation plan, enacted under the 2003 HEROES Act, was unconstitutional. Chief Justice John Roberts delivered the opinion of the court, joined by Justices Clarence Thomas, Samuel Alito, Brett Kavanaugh and Amy Coney Barrett.

“The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not,” wrote Chief Justice John Roberts in the majority opinion. “We hold today that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.”

Justice Elena Kagan penned the dissent, joined by fellow liberal justices Sonia Sotomayor and Ketanji Brown Jackson.

How did we get here and what’s next?

President Joe Biden’s student debt cancellation plan, first unveiled in August 2022, promised to erase up to $10,000 per individual borrower earning less than $125,000 annually or per married couple earning less than $250,000, and up to $20,000 for those who received a need-based Pell Grant while in college. The White House said that 90% of the relief would go to borrowers earning less than $75,000 per year.

Roughly 26 million borrowers applied or were automatically eligible for relief — and 16 million of them were approved by the Education Department and subsequently sent to loan servicers. The White House opened debt relief applications in October but closed them a month later as lawsuits swirled. The Supreme Court soon agreed to take on two of the lawsuits and held oral arguments for student debt cancellation on Feb. 28.

If you were among the millions of borrowers counting on this relief, you still have options to lower your monthly payments and even get some of your debt forgiven. Here’s what else borrowers need to know, and how to prepare for the impending end of forbearance.

What should I do now?

Get ready to make payments

Federal student loan payments are set to resume soon, with no possibility of further forbearance extensions. Interest will start accruing again on Sept. 1, and borrowers will have to resume monthly payments on their full student loan balance starting in October.

“Take your time, get very organized, identify where your loans are, what your repayment expectations are, sit down and actually create your own budget or spending plan,” says Stacey MacPhetres, senior director of education finance at EdAssist by Bright Horizons, an education and child care company. “And then take the time to figure out what you need to do.”

If you set money aside during the payment pause, consider making a lump sum student loan payment toward your balance before Sept. 1 to avoid racking up interest.

Find your servicer and set up payments

Check to see who your servicer is. Roughly 44% of borrowers now have a different federal student loan servicer than before the pandemic, according to the Consumer Financial Protection Bureau. You can identify your servicer by logging into your studentaid.gov account with your FSA ID or calling the Federal Student Aid Information Center at 800-433-3243.

Your servicer can help you do the following:

  • Check that your contact information is up to date.

  • Determine the amount you owe, the size of your monthly payments and when your first bill will be due.

  • Set up auto-pay. If you had this set up before forbearance, you’ll need to sign up again.

Expect long wait times when calling your servicer, cautions Scott Buchanan, executive director of the Student Loan Servicing Alliance. You may also be able to check some of this information on your servicer’s self-service online portal to avoid the customer service bottleneck.

Ask about income-driven repayment plans

If you anticipate not being able to make your student loan payment, your servicer can set you up with different payment plans and relief options. Consider asking about income-driven repayment (IDR) plans, which cap monthly bills at a set percentage of your income and erase remaining student debt after you make payments for a set number of years. If you earn below a certain income threshold or have lost your job entirely, you could pay as little as $0 per month under an IDR plan.

And a new IDR plan is in the pipeline that could cut monthly payments in half for most borrowers with undergraduate loans, and fast-track some with lower balances to forgiveness.

“I don’t know whether that plan will be ready to go in the fall,” Mayotte says. “But I know that there is a strong desire by the administration to get that plan, whatever it looks like, up and running sooner rather than later.”

If your student loans are in default

A temporary government program called Fresh Start could help if you had student loans in default before the payment pause. The program gives these borrowers the opportunity to re-enter repayment in good standing and access IDR plans and other relief.

Though borrowers will have one year to enroll in the Fresh Start program once forbearance officially ends this fall, they should apply as soon as possible, advises Michele Shepard, senior director of college affordability at The Institute for College Access & Success. The application is already open. You can sign up for the Fresh Start program today by going to myeddebt.ed.gov and logging in to your account, or calling the Federal Student Aid Office at 1-800-621-3115.

What if I can’t repay my student loans?

Shortly after the Supreme Court announcement on June 30, Biden announced a 12-month “on-ramp” repayment program. Borrowers who can’t make payments won’t fall into default until a year of missed payments, but interest will still accrue, so you should pay if you can.

Contact your servicer before you miss a payment. Ask about your options to lower or temporarily suspend payments through student loan deferment or forbearance. Start with an IDR plan, which sets payments at a portion of your income and extends your repayment term. These options can help keep you out of student loan delinquency (when a payment is late by as little as one day) and default (when a payment is at least 270 days late).

Don’t skip student loan payments. Defaulting on your loans can set off a devastating cascade of financial consequences, says Kristen Ahlenius, director of education at workplace financial wellness company Your Money Line. This can include credit score hits, seized paychecks and more.

Other ways to get help

Some nonprofit and legal organizations can offer student loan help as you navigate a return to payments. But be aware of scams, and avoid debt relief companies and anyone offering loan forgiveness. Only the government can forgive your student loans.

Here are some vetted student loan help resources to consider for information, advice or both; they are established organizations with verified histories:

“It feels like there’s a lot of fervor and panic right now,” MacPhetres says. “But there’s time, there’s opportunity, lots of repayment options and the servicers are there to help.”

Source: nerdwallet.com

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We do not write a lot of business with AXA, but the company has always performed well when we have worked with them.

This AXA life insurance company review was one of our more interesting because, though they were an honorable mention for our best life insurance company ratings, I really had not learned that much about them until now.

When people go to purchase a life insurance policy, there could be any number of different reasons why. For example, it could be for either personal or business purposes, meaning that the beneficiary of the policy may be a family member, a loved one, or even a charitable organization.

But regardless of what the coverage is for, there are still certain factors that you will need to keep in mind as you go through the life insurance purchasing process.

One of these criteria is the amount of protection that you are obtaining. This is because you will want to ensure that those who receive the life insurance proceeds will have enough funds to do what the coverage was intended for.

Yet another key item that people may not be aware of when buying a life insurance policy – but should be – is the importance of the insurance company that they are obtaining the coverage through.

This is because the insurer should ideally be stable and strong financially, and it should also have a good and positive reputation for paying out claims to its policyholders. That way, you will have more assurance that if and when a claim may need to be filed, your policy beneficiary (or beneficiaries) will be receiving their promised funds.

One company that has great respect in this area is AXA Equitable Life Insurance Company.

The History of AXA Equitable Life Insurance Company

AXA Equitable has been in the business of insuring its customers ever since the year 1859. This is when its founder, Henry Hyde – who was already in the insurance industry – left his current position at the Mutual Life Insurance Company of New York in order to begin his company. He initially named the firm Equitable Life Assurance Society of America. By the tenth year of its operation, Equitable Life Assurance Society of America had more new business than any other company worldwide.

As Equitable continued to grow, it built a new headquarters in 1870 – a skyscraper that included steam elevators. And, after an expansion just nine years later, the company’s building became the tallest building in the world at that time.

In the late 1800’s, Equitable marketed the very first joint and survivor annuity. The company also began the practice of paying out life insurance death claims immediately. In addition, the insurer appointed its very first female agency manager.

Throughout the years, the company continued to grow substantially. In 1992, it converted over from a mutual to a stock company. It also became a member of the Global AXA Group – and, by 2015, it had celebrated its 7th consecutive year as the best insurance name around the globe (as measured by the Interbrand annual report).

AXA Equitable Life Insurance Company Review

AXA Equitable offers a wide range of products and services to its customers. These include insurance and investments to help with both growing and protecting wealth. The company also offers employee benefit plans and other financial services for businesses.

Overall, AXA employees approximately 166,000 people in 64 countries, and worldwide the company has 103 million total customers. This large institution is extremely active in the communities through which it works, as well as in providing scholarships for college students.

For example, via the AXA Achievement program, the company assists both students and parents to take the next step towards college, as well as helps educators to take steps towards success.

Also, through the AXA Foundation, the company directs philanthropic and volunteer activities. The company also has a strong commitment to Corporate Responsibility. AXA Equitable is also known for being one of the world’s Top 10 insurers, according to the Insurance Journal. This ranking is based on the company’s non-banking assets.

Financial Strength and Ratings

AXA Equitable is considered to be an extremely strong company from a financial standpoint. It also pays out its insurance claims quickly and consistently to its policyholders. For these reasons and more, the insurer has been provided with high ratings from different agencies. These include the following (as of mid- and late 2015):

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  • A+ from A.M. Best Company (Superior). This is the second highest out of a total of 16 possible ratings.
  • AA- from Fitch. (Very Strong). This is the fourth highest out of a total of 21 possible ratings.
  • Aa3 from Moody’s. (Excellent). This is the fourth highest out of a total of 21 possible ratings.
  • A+ from Standard & Poor’s. (Strong). this is the fifth highest out of a total of 21 possible ratings.

Also, AXA Financial has been an approved business of the Better Business Bureau (BBB) since 1937. The company has been provided with a grade of A+ from the BBB (on a grade scale of A+ to F).

Throughout the previous 3 years, AXA has closed a total of 37 objections through the Better Business Bureau (13 of these were closed during the preceding twelve months). Of these 37 complaints, 20 had to do with the company’s products/services, four had to do with the company’s advertising/sales, and 3 had to do with the company’s billing/collection issues.

Life Insurance Products Offered By AXA Equitable

AXA Equitable offers a wide variety of different life insurance coverage products to choose from. This can allow its customers to better “customize” their policies to more closely fit their coverage needs. Life insurance products that are offered include both term and permanent options.

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Term Life Insurance Coverage

With a term life insurance policy, a death benefit is offered for a specific period of time. In most cases, the premium will be level for that time frame, and after the time has expired, the insured will need to re-apply for coverage if he or she still requires protection – unless the policy provides the ability to convert over to a permanent policy.

Because term life is considered to be the most basic form of life insurance – and it does not provide cash value build up – it can often be purchased very affordably. This is especially the case if the applicant is younger and in relatively good health at the time of application.

AXA Equitable offers the BrightLife Term product. This offers affordable premiums, which are guaranteed to stay level for time periods of 1, 10, 15, or 20 years, depending on which policy is chosen. Once the time frame has elapsed, the premium amount will increase each year. In order to qualify for a BrightLife term insurance policy, an applicant will only need to answer just eight simply questions on the application for coverage.

The policies can be very large and are available for more than $1 million of life insurance.

Permanent Life Insurance Coverage

With a permanent life insurance policy, there will be both death benefit protection, and also cash value. As long as the premium is paid, a permanent life insurance policy will typically remain in force for the remainder of the insured’s lifetime. This is the case regardless of his or her increasing age, and whether he or she contracts an adverse health condition.

Permanent life insurance also includes a cash value or investment component in the policy. Here, the policyholder is permitted to accumulate a savings or investment fund on the side on a tax-deferred basis. This means that there is no tax due on the gain in the account unless or until the funds are withdrawn.

The funds in this account can be withdrawn for any reason. Likewise, they may be borrowed, usually at a very favorable interest rate. This can be done for any reason that the policyholder sees fit.

There are several types of permanent life insurance that are offered through AXA Equitable. These include:

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Whole Life Insurance

Whole life insurance is considered to be the simplest of all of the permanent life insurance options. This is because the death benefit is guaranteed, and the cash value will grow at a set rate of interest over time. The premium amount is also locked in, never to increase.

AXA offers Interest Sensitive Whole Life. This is a permanent policy with a guaranteed minimum cash value that increases every year and equals the policy’s face amount when the insured reaches age 100. (Although the policy account value may be enhanced by additional interest).

Universal Life Insurance

Another type of permanent life insurance policy is universal life. Here, too, the policy has both a death benefit and a cash value component. However, these policies are more flexible because the policyholder can – within various guidelines – choose how much of the premium will go towards the death benefit, and how much will go towards the cash value.

AXA Equitable offers the Bright Life Protect universal life insurance policy. This is a flexible premium policy that offers the opportunity for lifetime insurance protection, as well as the potential accumulation of cash value via the allocation to a select account and / or a fixed account within the policy.

Variable Universal Life Insurance

A variable universal life insurance policy is type of permanent life insurance that combines death benefit protection with an investment opportunity. Here, the policyholder will obtain the protection of a death benefit, and via the cash value component, they can choose various equity investments such as mutual funds. This can allow the funds to grow much more than those that are in a whole life insurance policy. There can, however, also be more risk due to the market exposure.

AXA Equitable offers the Incentive Life Optimizer lll variable universal life insurance policy. This offers death benefit protection, along with the potential for cash value accumulation via a customized and professionally managed investment portfolio.

There is also the Incentive Life Legacy lll variable universal life insurance policy. This policy was created more for those who are seeking affordable permanent life insurance, but who would also like to put their premium to work through market sensitive investment options.

Other Coverage Products Available

In addition to life insurance, AXA Equitable also provides a number of other coverage products, as well as investments and advisory services.

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Just some of the other offerings provided by AXA include the following:

How to Find the Best Life Insurance Premium Quotes on Coverage

When searching for the top life insurance premium quotes for coverage – whether it is on a policy via AXA Equitable Life Insurance Company, Banner Life, or through any other life insurer – it is typically the best course of action to work with an agency or brokerage that has access to multiple insurance carriers.

This is so that you can directly compare several different policies, benefits, and premium prices, and then you can determine which one will work the perfectly for you and your specific coverage needs.

This is not only true for your purchase of life insurance but for other forms of coverage as well, such as auto insurance and health insurance, make sure to obtain more than one or two quotes so that you are getting the best rate for your needs.

We know that the buying of insurance coverage can be an important decision. With all of the various things to be conscious of – as well as the many carriers – it can be difficult to choose. That is why it is important to have someone to walk you through the process of determining which will be the greatest for you. Reach out to us today.

Source: goodfinancialcents.com

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It appears the pesky down payment hurdle to homeownership is finally being swept aside.

This week, Fifth Third Bank out of Cincinnati, Ohio announced the availability of a mortgage with absolutely no down payment requirement.

Put simply, that means you no longer need to save up to buy a home, whether that’s actually a good thing or a bad thing.

This seems to have been borne out of necessity, not preference, especially as home prices reach new heights nationwide.

Fifth Third’s Down Payment Assistance Program

  • If you’re light on down payment money
  • You may want to check out Fifth Third’s DPA program
  • Which offers up to $3,600 in down payment assistance
  • Combined with Freddie Mac’s Home Possible Advantage mortgage to create a zero down home loan option

The so-called “Down Payment Assistance Program” from Fifth Third relies upon Freddie Mac’s Home Possible Advantage, which allows for loan-to-value ratios as high as 97%.

The remaining three percent of the home purchase price is covered by Fifth Third via down payment assistance.

Fifth Third will allow up to $3,600 in down payment assistance, meaning the property price can’t exceed $120,000.

That $3,600 doesn’t need to be paid back, and it can used toward the down payment or closing costs depending on product type.

So the loan program is clearly geared toward those with low or moderate income, not just anyone looking to forego the usual down payment requirement.

The property must also be located in the following states: MI, IN, IL, KY, TN, OH, WV, NC, GA, FL.

To qualify, the property must either be located in a Low Income Census Tract or the borrower must meet the low income limit threshold based on figures from the Federal Financial Institutions Examination Council (FFIEC) website.

Prospective home buyers can also utilize local and state housing programs to “take advantage of free money for their down payments.”

Fifth Third does note that the down payment assistance might be treated as taxable income and reported to the IRS, so keep that in mind when pursuing this type of loan.

You don’t need to be a first-time home buyer to take advantage of this program, and if it aligns with Freddie Mac’s guidelines, the minimum FICO score is just 620.

It turns out Fifth Third accepts credit scores as low as 600, which is pretty amazing when coupled with a no down payment loan program.

However, if you are a first-timer, you probably have to complete some form of homeowner education.

The property must be a single-unit, primary residence, though I believe both single-family homes and condos/townhouses qualify.

Loan options are probably restricted to fixed-rate offerings, with the 30-year fixed the most likely candidate for home buyers with limited means.

No Money in the Bank Might Not Be a Problem

  • Aside from not needing a down payment
  • You might be able to qualify without reverses as well
  • So having no money in the bank isn’t necessarily a roadblock here
  • You can also enjoy reduced mortgage insurance premiums

The Freddie Mac program doesn’t require asset reserves so qualifying homeowners may be able to purchase a home with absolutely no money in the bank.

Additionally, it comes with reduced mortgage insurance premiums, making monthly payments more affordable to those with limited income.

Fifth Third is the latest bank to offer a low or no-down payment mortgage option.

A couple weeks ago, Guaranteed Rate launched a 1% down mortgage that relies upon a forgivable grant as high as 7% of the purchase price.

Quicken Loans, the largest nonbank mortgage lender in the nation, also has a 1% down payment mortgage that isn’t widely publicized.

Interestingly, all of these new mortgages rely on conforming loan programs and noticeably snub government lending such as FHA, which fell out of favor recently after a number of lawsuits.

While it’s great to have another flexible mortgage option, keep in mind that it may be more difficult to get your offer accepted if you are putting little to nothing down.

Home sellers aren’t particularly keen on seemingly high-risk buyers because chances of lender fallout are higher.

Read more: 3 ways a low down payment raises your monthly mortgage payment.

Source: thetruthaboutmortgage.com

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Other than possible lender-imposed waiting periods after a mortgage loan closes, you can generally refinance your home as many times as you like. But you’ll want to do the math first.

Homeowners choose to refinance for a number of reasons: to lower monthly payments, take advantage of lower interest rates, get better terms, pay the loan off more quickly, or eliminate private mortgage insurance.

Refinancing involves paying off the current mortgage with a second loan that has (hopefully) better terms. Borrowers don’t have to stay with the same lender—it’s possible to shop around for the best deals.

Mortgage rates seem to be constantly in flux, moving mostly in parallel with the federal interest rate. In 2021, the average rate of a 30-year fixed mortgage was 2.96%. In 2022, as the Federal Reserve raised interest rates to try to tame inflation, mortgage rates began to rise and jumped to more than 7%. By mid-June 2023, the average rate of a 30-year fixed mortgage was 6.69%.

So is now the right time for you to refinance? Here are some things to consider before taking the plunge.

The Basics of Mortgage Refinancing

Because a homeowner who chooses to refinance is essentially taking out a new loan, the cost of acquiring the new loan must be compared with potential savings. It could take years to recoup the cost of refinancing.

As with the initial mortgage loan, a refinance requires a number of steps, including credit checks, underwriting, and possibly an appraisal.

Typically, however, many homeowners start with an online search for the rates they qualify for. (A lower average mortgage rate doesn’t necessarily translate to an individual offer—creditworthiness, debt-to-income ratio, income, and other factors similar to what’s required for an initial mortgage will matter.)

The secret sauce that makes up a mortgage refinance rate might seem like a mystery, but there are some common factors that can affect your offer:

•  Credit score: As a general rule, higher credit scores translate to lower interest rates. A number of financial institutions and credit card companies will give account holders access to their credit scores for free, and a number of independent sites offer a free peek, too.
•  Loan term/type: Is the loan a 30-year fixed? A 15-year? Variable rate? The selected loan repayment terms are likely to affect the interest rate.
•  Down payment: A refinance doesn’t typically require cash upfront, as a first-time mortgage usually does, but any cash that can be put toward the value of a loan can help reduce payments.
•  Home value vs. loan amount: If a home loan is extra large (or extra small), interest rates could be higher. But generally speaking, the less the mortgage amount is compared with the value of the home, the lower the interest rates may be.
•  Points: Some refinance offers come with the option to take “points” in exchange for a lower interest rate. In simplest terms, points are discounts in the form of a fee that’s paid upfront in exchange for a lower interest rate.
•  Location, location, location: Where the property is physically located matters not only in its value but in the interest rate you might receive.

What Types of Refinance Loans Are Out There?

As with first-time home loans, consumers have a number of refinance mortgage options available to them. The two most common types involve either changing the terms of the original loan or taking out cash based on the home’s equity.

A rate-and-term refinance changes the interest rate, repayment term, or sometimes both at once. Homeowners might seek out this type of refinance loan when there’s a drop in interest rates, and it could save them money for both the short term and the life of the loan.

A cash-out refinance can also change the terms or interest rate, but it includes cash back to the homeowner based on the home’s equity.

Within those two basic types of refinance options, conventional mortgages from traditional lenders are the most common. But refinancing can also happen through a number of government programs.

Some, like USDA-backed loans , require the initial mortgage to be a part of the program as well, but others, such as the VA, have a VA-to-VA refinance loan called an interest rate reduction refinance loan and a non-VA loan to a VA-backed refinance , so it’s important to shop around to find the best option.

How Early Can I Refinance My Home?

If a home purchase comes with immediate equity—it was purchased as a foreclosure or short sale, for example—the temptation to cash out immediately with a refinance may be strong. The same could be true if interest rates fall dramatically soon after the ink is dry on a mortgage. Especially for conventional loans, it may be possible to refinance right away. Others may require a waiting period.

For example, there can be a six-month waiting period for a cash-out refinance. Or, refinancing via government programs like the FHA streamline refinance or VA’s interest rate reduction refinance loan can require waiting periods of 210 days.

Lenders can require a waiting period (also called a “seasoning period”) until they refinance their own loans for a number of reasons, including assurance insurance that the original loan is in good standing.

For a cash-out refinance, some lenders may also require that the home has at least 20% equity.

Questions to Ask Before You Refinance

Just because you can refinance doesn’t necessarily mean you should. First, ask yourself these questions.

What Is the Goal?

Identifying the endgame of a mortgage refinance can help determine whether now is the right time. If a lower monthly payment is the goal, it can be wise to play around with a refinance calculator to see just how much a lower interest rate will help.

For years, it has been a general rule that a refinance should lower the interest rate by at least 2 percentage points to be worth it. Some lenders believe 1 percentage point is still beneficial (each percentage point amounts to roughly $100 a month in payment reduction), but anything less than that and the savings could be eaten up by closing costs.

What Is the Total Repayment Amount?

It’s important to remember that a lower monthly payment—even if it’s significantly less—doesn’t necessarily equal savings in the long run.

If a mortgage with 20 years remaining is refinanced to lower the monthly payment, for example, the most affordable option could be a 30-year mortgage. But is the lower monthly payment worth it if you’ll be paying it off for 10 additional years?

Will I Need Cash to Close?

One of the biggest differences between a first-time mortgage and a refinance is the amount it costs to close the loan. Many times, closing costs for a refinance can be rolled into the loan, requiring no cash at the outset.

Closing costs typically come in at 2% to 5% of the loan amount, and although they can be rolled into the loan and paid off over time, that could mean the new monthly payment isn’t as low as planned.

One way to make sure the investment is worth the cost is to consider how long it would take you to reach the break-even point, which is when you recoup the costs of refinancing. For instance, if it takes you 24 months to reach the break-even point, and you plan on living in your home for at least that long, refinancing may make sense for you.

Considering refinancing your home? SoFi offers mortgage refinance loans with competitive interest rates.

Whenever you’re ready to refinance, SoFi is here to help.


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Source: sofi.com

Apache is functioning normally

Federal Housing Finance Agency (FHFA) Director Sandra Thompson defended on Tuesday the recent policy changes the agency has implemented, which have been criticized by the housing industry and Republican lawmakers on Capitol Hill.

In a House Financial Services Committee hearing on Tuesday titled “FHFA Oversight: Protecting Homeowners and Taxpayers,” the committee memorandum described Thompson’s actions as director of the agency, highlighting two policies in particular.

The policies under fire include a new capital rule for the government-sponsored enterprises (GSEs), called the Enterprise Regulatory Capital Framework (ERCF), and the controversial pricing adjustments to fees the GSEs charge lenders on single-family loans, or Loan-Level Price Adjustments (LLPAs).

Thompson, however, defended the policies, contending that certain reports include incorrect or misleading information about the impact the policies could have on good-credit borrowers.

“As Representative Cleaver rightly pointed out at last week’s subcommittee hearing on this topic, housing finance is a complex issue and the pricing grids underpinning this framework are not easily digestible,” Thompson said in her written statement. “Unfortunately, certain media reports have distorted basic facts by painting an incomplete and misleading picture of these pricing updates. These media reports often make the fundamental mistake of assuming that the pricing grids previously in place were perfectly aligned with the risks faced by the Enterprises.”

Thompson characterized this as a “myth,” stating that pricing grids that were in effect prior to the roll-out of these updates had not been updated in many years, and were not “fully reflective of the capital framework with which the Enterprises are required to comply.”

Thompson also took direct aim at claims that good-credit borrowers are negatively impacted by the subsidies for lower-credit borrowers.

“I want to be very clear on one key point, and one that bears repeating: under the new pricing framework, borrowers with strong credit profiles are not being penalized to benefit borrowers with weaker credit profiles,” Thompson said. “That is simply not true.”

Instead, the updated pricing framework implemented by the agency helps to fulfill the title of the hearing in “protecting homeowners and taxpayers,” according to Thompson.

“First, the updated pricing framework supports American homeowners by eliminating the upfront fees for many creditworthy borrowers—first-time homebuyers with lower incomes, for example—and does so by increasing the fees on products that are less central to homeownership, such as second homes or vacation homes,” she said. “These targeted changes promote homeownership that is both attainable and sustainable. Second, the updated pricing framework enables the Enterprises, both of which are taxpayer-supported, to build capital in a safe and sound manner.”

Thompson’s comments also included references to the FHFA’s review of the Federal Home Loan Bank System announced in August 2022; an active review of credit score models in concert with the GSEs; technological advancements sought by the GSEs themselves; and payment deferrals for borrowers facing financial hardship.

Prior to the FHFA rescinding its plans to change the LLPA fee structure, both housing industry advocates and politicians voiced their concerns. In April, Republicans in the House introduced a bill to block the LLPA changes from taking effect.

Thompson said at the time that the agency “will provide additional transparency on the process for setting the Enterprises’ single-family guarantee fees and will request public input on this issue.”

Source: housingwire.com

Apache is functioning normally

Today we’ll review Axia Home Loans, an up-and-coming independent mortgage bank that’s licensed in 17 states nationwide.

In case you were wondering, Axia is a Greek word that means “value” or “worth.”

They’re based out of the Pacific Northwest, Bellevue, Washington to be exact, and have been around for just over a decade, since 2007.

But they’ve still managed to become a billion-dollar mortgage lender, funding nearly $1.4 billion via the retail channel in 2019.

Axia Home Loans Fast Facts

  • Retail mortgage lender founded in 2007
  • Headquarters in Bellevue, Washington
  • Licensed to originate home loans in 17 states
  • Nation’s first 100% employee-owned independent mortgage bank
  • Funded roughly $1.4 billion in home loans during 2019
  • Half of their loan volume comes from Nevada and Washington
  • About two-thirds of total volume was home purchase financing
  • Just launched a mortgage broker division called United Reliance Wholesale (UR Wholesale)

Axia did about 30% of total loan volume in its home state of Washington, with another 20% in nearby Nevada.

Aside from those two states, they’re also licensed in Arizona, California, Florida, Hawaii, Idaho, Minnesota, Montana, North Carolina, Oregon, Pennsylvania, South Carolina, Texas, Utah, Wisconsin, and Wyoming.

They seem to specialize in home purchase financing, likely due to strong relationships with local real estate agents. But they also do a lot of refinance volume as well.

In October 2020, they launched a wholesale lending division for mortgage brokers called Unified Reliance Wholesale (UR Wholesale), with plans to focus on the West Coast, primarily in California.

How to Apply with Axia Home Loans

  • You can get started online, in-branch, or over the phone
  • They offer a digital mortgage application known as Axia Express
  • Allows you to securely link financial accounts and scan documents
  • Axia processes, underwrites, and funds all their home loans in-house

Axia Home Loans processes, underwrites, and funds their loans in-house, allowing them to close your mortgage quickly and efficiently.

They rely on emerging technologies like a digital mortgage application and smartphone app to make it easier to finance a new home purchase or refinance an existing home loan.

Their loan application is known as “Axia Express,” a platform that gives customers the option to automatically pull in tax returns, employment history, and bank statements.

Additionally, you can securely scan and upload documents from your mobile device and chat with your loan officer if you have questions.

Once submitted, you can track loan progress and receive status updates as your home loan makes its way to the finish line.

To get started, you can visit their website and select “Start the Home Loan Process” or “Connect with a Local Advisor.”

If you choose the first option, you can select a loan officer if you’ve been referred or know who you’ll be working with. From there, you can apply for a loan.

If you don’t have a loan originator, you’ll need to fill out a basic form with contact info and wait for a loan officer to contact you.

If you choose the Connect with a Local Advisor option, it’ll show you branches nearby and local loan officers who work there. Once you click through to a specific branch, you can apply online.

Axia Home Loans Mortgage Options

  • Home purchase loans
  • Rate and term refinances
  • Cash out refinances
  • Conventional loans backed by Fannie Mae and Freddie Mac
  • Government-backed loans including FHA, USDA, and VA
  • Jumbo home loans
  • HomePath financing
  • Fixed-rate and adjustable-rate loans in various terms

Axia Home Loans offers both home purchase financing and mortgage refinances, including rate and term refinances and cash out refinances.

Those thinking of buying a home can take advantage of Axia’s Certified Homebuyer Program, which is an actual credit approval that is analyzed by their underwriting department (verified pre-approval).

You can get a home loan on a primary residence, second home, or an investment property.

They offer conventional loans backed by Fannie Mae and Freddie Mac and government home loans, including FHA, USDA, and VA loans.

Those in need of larger loan amounts can get a jumbo home loan from Axia as well.

Additionally, they provide HomePath financing on Fannie Mae-owned properties.

In terms of loan programs, you can get either a fixed-rate mortgage (such as a 15-year or 30-yer fixed) or an adjustable-rate mortgage, like a 5/1 ARM.

It’s unclear if they offer renovation or construction loans, or any home equity line/loan products.

All in all, they have loan programs to fit the needs of most customers.

Axia Home Loans Mortgage Rates

While Axia says they offer competitive rates, they don’t advertise mortgage rates on their website.

While this doesn’t indicate whether their rates are good, bad, or just plain average, it does make it a bit more difficult to get pricing.

In other words, you’ll need to get in contact with a loan officer to see what type of mortgage rate you qualify for.

The same goes for lender fees, which don’t appear to be listed on their website. Be sure to inquire about what they charge, such as underwriting, processing, and loan origination fee.

All that will factor into the mortgage APR, which is an important calculation that takes into account both the interest rate and the fees included.

Axia Home Loans Reviews

On Zillow, Axia Home Loans enjoys a 4.95-star rating out of 5 on roughly 2,000 customer reviews.

You can click on individual loan officer names as well to get their ratings if you want to work with someone highly-rated.

While they keep us in the dark regarding mortgage rates, many of the Zillow reviews indicate that both interest rates and closing costs were favorable.

On SocialSurvey, they’ve got a 4.92 rating out of 5 from more than 13,000 customer reviews.

And on BirdEye, a 4.9 rating based on more than 200 reviews. So they appear to consistently make their customers happy.

They also say they’ve got a 98% client satisfaction rating based on current surveys.

Lastly, they are accredited with the Better Business Bureau and currently have an A+ rating. There are no customer reviews on the BBB website and few complaints.

Axia Home Loans Pros and Cons

The Good

  • Can apply online, by phone, or in-branch
  • Offer free personalized mortgage consultations
  • Digital mortgage application
  • Free smartphone app
  • Free mortgage calculator on site
  • 100% employee-owned mortgage lender
  • Some of their loan officers speak Spanish and Vietnamese
  • Excellent customer reviews
  • A+ BBB rating

The Maybe Not Good

  • Only licensed in 17 states
  • Do not disclosed their mortgage rates
  • No mention of lender fees
  • Don’t offer home equity loans/lines

(photo: SounderBruce)

Source: thetruthaboutmortgage.com