Apache is functioning normally

June 18, 2024 by Brett Tams

Would Donald Trump’s return to the White House be good for the mortgage industry? Experts aren’t so sure.

The majority of mortgage professionals voted Republican in 2020 and say they’ll do the same this November, according to a recent Arizent survey. Many housing finance players still support President Biden, but the business is about the most Republican-leaning group among their financial services peers also surveyed.

No matter who’s in the Oval Office over the following four years, stakeholders suggest neither leader will directly help lenders and origination activity.

“We’re not assuming the election changes anything significantly for the mortgage industry,” said Bose George, managing director at Keefe, Bruyette and Woods.

Lenders are most worried about interest rates, a number the president, despite any past criticisms, has no control over. Experts who spoke to National Mortgage News about a possible Trump second term pointed to the small impacts his potential second term could deliver.

Source: nationalmortgagenews.com

Apache is functioning normally

June 18, 2024 by Brett Tams

We live in a fast-paced world and are accustomed to immediate gratification. Just as we can get groceries delivered in minutes and order a new movie online with a few clicks, so too do we often expect our bank deposits to be available immediately.

But it doesn’t always work that way when it comes to finances. Some things do require a wait, even though it may seem like they should happen instantaneously. When money is put into a bank account, it can take a while for the deposited funds to appear and become available. Here’s a simple breakdown of how long it takes for funds to clear.

What Are Cleared Funds?

Depositing money into a bank account doesn’t always make those funds appear immediately. It can take time for the funds to clear and become available to use. This is because banks and credit unions may place a temporary hold on the deposit. When this happens, the account holder can see their “total balance” on their account and their “available balance.” The latter is the amount of the total balance minus any pending deposits. The available balance is, as the name indicates, what is available for use.

Why Banks Put a Hold on Deposits

One reason why banks don’t immediately declare deposits to be cleared funds is to help avoid issues that can arise when a deposit bounces. Having a brief waiting period helps protect customers from bank fraud and from paying unnecessary fees. If a bank were to allow a customer to spend funds from a check that ends up bouncing, the customer would then need to repay the bank the amount they deposited and probably pay an overdraft fee (even if the customer wasn’t at fault).

Some holds take longer than others. The federal government regulates the max amount of time a banking institution can hold onto the funds before they make them available to the account holder. Banks and credit unions also have their own policies regarding how long it will take for funds to become available after a deposit, which can be shorter than federal regulations. It can be helpful to review your bank’s policies for holding deposits so you can get a better idea of when cleared funds will become available. That way, you won’t accidentally overdraw your account.

How Do Cleared Funds Work?

Cleared funds appear in a bank account, such as a checking account, after the holding period ends. Usually, this holding period lasts until the next business day, but it can take longer. Weekends and holidays can slow this process down. The type of deposit made can also affect the timeline.

Here’s a specific example: If you deposit a check via an ATM that is not part of your bank’s network, you will probably have to wait a while to access the money. It may take up to five days before that check becomes available cash in your account.

Compare that to the case of electronic deposits made via the Automated Clearing House (ACH). The funds can actually clear and become available as soon as the same day. Having a paycheck deposited via direct deposit can help you access your money a lot faster than if you deposited a check at an ATM.

Breakdown of Times of Cleared Funds

All banks and credit unions have their own timeline they follow surrounding cleared funds. In addition, the federal government sets a maximum limit for how long they can make consumers wait to access their deposit.

Here’s a quick breakdown of the federally allowed wait times for different types of transactions, from wiring money to check deposits.

Type of Deposit	Timeline
Direct Deposit	Up to the second business day
Wire Transfer	Up to the second business day
Paper check (less than $200)^*	Next Business Day
Cash^*	Same day or next business day
U.S. Treasury check^*	Next Business Day
U.S. Postal Service money order^*	Next business day
State or local government check^*	Next business day
Casher’s, certified, or teller’s check^*	Next business day
Mobile check deposit	Up to second business day
Federal Reserve and Federal Home Loan checks^*	Next business day
Any other checks or non-U.S. Postal Service money orders	Second business day
Deposits made at an ATM owned by the customer’s financial institution	Second business day
Deposits made at an ATM not owned by the customer’s financial institution	Fifth business day

*Deposited in person.

It’s worth noting that these are the maximum hold times allowed; in many cases these deposits happen much quicker. Again, it’s worth reviewing the bank’s funds availability policy. This will be listed in the account agreement given to you, the account holder, when you opened an account. You can also ask the bank for a copy of their holding policies or look online for it.

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When Can You Withdrawal Cleared Funds?

Deposits often clear in segments. That is, a portion of the funds will become available in your checking account before the whole amount deposited is ready for use. In most cases, the bank has to allow the customer to access $225 from the deposit at the start of the next business day. You could either withdraw cash or write a check. Usually the rest of the deposit is available on the second business day, unless something occurs to trigger a delay.

Cleared Funds vs Available Funds

The terms “cleared funds” and “available funds” both refer to funds that are available for immediate withdrawal or use. It’s important to keep in mind that simply depositing a check doesn’t mean you can use the money right away.

• Regarding a deposit, the $225 that must be made available by the next business day is known as your cleared or available funds. So on the next day, you can go ahead and use that amount.

• However, the rest of your deposit may not yet be available. If you try to draw against it, you are risking overdraft and charges. The full amount of the deposit may take up to a few more days to become ready for use.

Reasons Why Deposits May Be Delayed Until They Become Cleared Funds

There are a few different reasons why deposits can be delayed on their path to becoming cleared funds. Let’s examine some of these.

Deposits Over $5,000

When it comes to large deposits (excluding cash or electronic payments), the bank is typically required to make the first $5,525 of the deposit available by the second business day and the remainder available on the seventh business day, or later.

Recommended: Where to Cash a Check Without Paying a Fee

Brand New Customer Accounts

Newer customer accounts (less than 30 days old) can experience deposit delays up to nine days. Although with official checks and electronic payments, partial funds can be available the next day. (If you are in this situation and in a rush to make a payment, you can look into other ways to send money to another’s bank account, such as P2P apps. These can draw upon other available funds.)

Post-Dated or Fraudulent Checks

If a bank has reason to suspect a deposit is suspicious (such as if a check appears to be fraudulent), then it may hold the funds for longer than normal. A couple of examples of what might cause this kind of hold:

• A check is post-dated, meaning it’s been filled out to show a date that is in the future.

• A check is more than 60 days old.

The Takeaway

Cleared funds are the funds that become available once a deposit to a bank account clears. That means the money is ready for use. The timeline for funds clearing depends on several factors, such as where, when, and how the deposit was made and how large the amount is. Some funds may clear right away, while others can take a few days. However, federal laws are in place regarding how long a bank can wait to clear funds. By understanding this process, you can likely manage your financial life a little better and avoid situations that involve overdrafts or bounced checks.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

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FAQ

What is the difference between a cleared balance and an available balance?

A cleared balance (or cleared funds) and an available balance are the same thing — it’s the amount of money in your account that is available for immediate withdrawal or use.

How long does it take to get money cleared?

Some deposits clear as soon as the same day, but most generally clear the next business day. In some cases, though, a deposit can take as long as nine days to clear. Check with your bank to know their timelines.

Can you reverse a cleared check?

Once a check has cleared, there is little that can be done to reverse the transaction. If, however, a cleared check is to be found fraudulent, it may be possible for a bank to intervene.

Photo credit: iStock/RgStudio

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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Source: sofi.com

Apache is functioning normally

June 17, 2024 by Brett Tams

Today’s mortgage rates

Average mortgage rates edged a little higher last Friday. But that didn’t spoil a good week during which those rates tumbled overall.

Earlier this morning, markets were signaling that mortgage rates today might increase. But these early mini-trends often alter speed or switch direction as the hours pass.

Current mortgage and refinance rates

Find your lowest rate. Start here

Program	Mortgage Rate	APR*	Change
Conventional 15-year fixed	6.445%	6.524%	+0.01

30-year fixed VA	6.962%	7.008%	+0.28

Conventional 30-year fixed	7.007%	7.057%	+0.01

Conventional 20-year fixed	6.774%	6.829%	+0.08

Conventional 10-year fixed	6.377%	6.455%	+0.03

5/1 ARM Conventional	6.612%	7.913%	-0.03

30-year fixed FHA	6.907%	6.953%	+0.2

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 your mortgage rate today?

Don’t be fooled by recent falls in mortgage rates. It may feel as if those rates have been falling more than rising, not least because they have since mid-April. But there was a sharp rise immediately before the subsequent fall. And, if you go back three months, mortgage rates were lower then than they are now.

Looking across the longer term, mortgage rates remain on an upward trajectory. But, this year, they’ve effectively been moving sideways so perhaps the upward trend is moderating or plateauing.

What we’re not seeing yet are sustained falls. And I judge the chances of falls and rises at roughly 50-50. Would you want to bet on those odds? I wouldn’t.

So, 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 60 days

Of course, don’t lock your rate when mortgage rates look likely to fall. My recommendations are based on longer trends. And, within those, there will be rate-friendly days and longer periods that you can take advantage of.

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 are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:

The yield on 10-year Treasury notes climbed to 4.29% from 4.22%. (Bad for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were falling this morning. (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 ticked down to $79.05 from $79.07 a barrel. (Neutral for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Gold prices decreased to $2,337 from $2,346 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — inched down to 38 from 40 out of 100. (Good 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, post-pandemic upheavals, and war in Ukraine, 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 look likely to rise. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.

Find your lowest rate. Start here

What’s driving mortgage rates today?

This week

Seven senior Federal Reserve officials have speaking engagements today and tomorrow. And they may try to correct any misapprehensions markets still have following last Wednesday’s Fed events.

The Fed made it pretty clear then that it expected to make only one cut to general interest rates during 2024. But markets are already second-guessing that, with the CME Group finding investors reckon there’s a 70% chance of two such cuts.

That explains markets’ muted reaction to last week’s pronouncements by the Fed. They simply didn’t believe the central bank’s message.

Investors have a pretty patchy record for second-guessing the Fed. But they’re sometimes correct. If they’re right this time, that could be good for mortgage rates. But, if the Fed sticks to its guns, that could be bad for them.

Today

This morning’s lone economic report is the June Empire State manufacturing survey. I don’t remember the last time that affected mortgage rates so we shouldn’t lose any sleep over it.

There is some economic news around that could influence markets. China’s growth is slowing and its property market is in trouble. And the French snap parliamentary election is freaking out some investors as the possibility of a hard-right party taking power is regarded as economically undesirable.

But the Chinese and French news would normally be helpful to mortgage rates. So, why were those rates rising overnight?

Well, it may be that investors are jittery over tomorrow’s economic data.

Tomorrow

Tomorrow morning, we’re due May data on:

Retail sales — Markets expect sales to edge up by 0.2% from April’s 0.0%
Industrial production and capacity utilization — Markets expect industrial production also to nudge up to 0.4% from April’s 0.0%. And capacity utilization, too, is expected to improve: to 78.6% from 78.4%

So, markets are expecting those numbers to show improvements, which would normally be bad for mortgage rates. But, luckily, those expectations are already baked into mortgage rates. And it’s the gap between those and tomorrow’s actual numbers that could create volatility.

For the best chance of mortgage rates falling, we’d like to see smaller numbers than markets are expecting. Bigger ones could push those rates upward.

The rest of the week

Bond markets are closed on Wednesday for the Juneteenth holiday. So, mortgage rates shouldn’t move that day, and my daily report won’t appear.

I’ll brief you on Thursday and Friday’s economic reports that might move mortgage rates on the day before each appears. But most on the calendar rarely affect those rates.

If you’re hungry for more information about what’s moving mortgage rates, do click through to the latest weekend edition of this daily report. It provides a deeper analysis together with a preview of what to expect in the coming week. It’s published each Saturday morning soon after 10 a.m. Eastern.

Recent trends

According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.

Freddie’s Jun. 13 report put that same weekly average at 6.95%, down from the previous week’s 6.99%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures. Still, they’re a good way to track trends.

Expert forecasts for mortgage rates

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 last three quarters of 2024 and the first quarter of 2025 (Q2/24, Q3/24 Q4/24 and Q1/25).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on May 22 and the MBA’s on May 17.

Forecaster	Q2/24	Q3/24	Q4/24	Q1/25
Fannie Mae	7.1%	7.1%	7.0%	6.9%
MBA	6.9%	6.7%	6.5%	6.4%

Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.

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.

Find your lowest mortgage 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?

Verify your new rate

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.

Verify your new rate. Start here

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.

Check your refinance rates today. Start here

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.

So, 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.

Indeed, 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.

Verify your new rate. Start here

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 as evidence of their financial circumstances. 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. And 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.

Time to make a move? Let us find the right mortgage for you

Current mortgage rates methodology

We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.

Source: themortgagereports.com

Apache is functioning normally

June 17, 2024 by Brett Tams

Despite the likelihood of rates remaining high for the foreseeable future, many buyers are determined to push ahead with their homebuying plans – with or without a rate cut by the Fed, according to a prominent Virginia-based mortgage professional. Kristi Hardy (pictured top), executive vice president, area manager and senior loan officer at Atlantic Coast … [Read more…]

Apache is functioning normally

June 17, 2024 by Brett Tams

The average interest rate for a standard 30-year fixed mortgage is 7.01% today, down -0.04% since one week ago. The average rate for a 15-year fixed mortgage is 6.45%, which is a decrease of -0.12% compared to a week ago. For a look at mortgage rate movement, see the chart below.

The Federal Reserve has been holding off on interest rate cuts because inflation has been slow to improve. While experts still expect mortgage rates to gradually move lower in the coming months, housing market predictions can always change in response to economic data, geopolitical events and more.

Today’s average mortgage rates

Today’s average mortgage rates on Jun. 17, 2024, compared with one week ago. We use rate data collected by Bankrate as reported by lenders across the US.

Lower mortgage rates may finally be on their way. To get the best rate, experts say to compare loan offers from at least three different mortgage lenders. You can get a custom quote from one of CNET’s partner lenders by entering your information below.

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

What is a good mortgage type and term?

Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. With a fixed-rate mortgage, the interest rate is set for the duration of the loan, offering stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront.

30-year fixed-rate mortgages

For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 7.01% today. A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you’ll have a lower monthly payment.

15-year fixed-rate mortgages

Today, the average rate for a 15-year, fixed mortgage is 6.45%. Though you’ll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner.

5/1 adjustable-rate mortgages

A 5/1 adjustable-rate mortgage has an average rate of 6.61% today. You’ll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option.

Current mortgage rate trends

At the start of the pandemic, mortgage rates were near record lows, around 3%. That all changed as inflation began to surge and the Federal Reserve kicked off a series of aggressive interest rate hikes starting in March 2022 to slow the economy, which indirectly drove up mortgage rates.

Now, more than two years later, mortgage rates are still around 7%. Over the last several months, mortgage rates have fluctuated in response to economic data and investors’ expectations as to when the Fed will start to lower rates.

Today’s homebuyers have less room in their budget to afford the cost of a home due to elevated mortgage rates and steep home prices. Limited housing inventory and low wage growth are also contributing to the affordability crisis and keeping mortgage demand down.

When will mortgage rates go down?

Most experts predict mortgage rates will fall below 7% in the coming months. However, a sustained downward trend will depend on several factors, including upcoming inflation and labor data.

The Fed hasn’t hiked interest rates in almost a year, but an actual rate cut doesn’t appear imminent. Some experts say the first cut could come as early as July, though it’s more likely we see the Fed lower rates in September or November.

“If the Fed makes any moves later this year, the signal would be sufficient for the mortgage market, and mortgage rates would start falling,” said Selma Hepp, chief economist at CoreLogic. “In that case, we could see the mortgage rates around 6.5% at the year-end.”

One thing is for sure: Homebuyers won’t see lower mortgage overnight, and a return to the 2-3% mortgage rates from just a few years ago is unlikely.

Here’s a look at where some major housing authorities expect average mortgage rates to land.

Calculate your monthly mortgage payment

Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET’s mortgage calculator below can help homebuyers prepare for monthly mortgage payments.

How can I get the lowest mortgage rates?

Though mortgage rates and home prices are high, the housing market won’t be unaffordable forever. It’s always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right.

Save for a bigger down payment: Though a 20% down payment isn’t required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest.
Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates.
Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments.
Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs.
Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.

Source: cnet.com

Apache is functioning normally

June 17, 2024 by Brett Tams

Inside: Learn what 17 an hour is how much a year, month, and day. Plus tips to budget your money. Don’t miss the ways to increase your income.

You’re probably wondering if I made $17 a year, how much do I truly make? What will that add up to over the course of the year?

Is $17.00 a living wage?

Is this wage something that I can actually live on? Or do I need to find ways that I can increase my hourly wage?

In this post, we’re going to detail exactly what $17 an hour is how much a year. Also, we are going to break it down to know how much is made per month, bi-weekly, per week, and daily.

Then, you will know how much is 17 dollars an hour annually.

That will help you immensely with how you spend your money. Because too many times the hard-earned cash is brought home, but there is no actual plan for how to spend that money.

By taking a step ahead and making a plan for the money, you are better able to decide how you want to live, make sure that you put your money goals first, and not just living paycheck to paycheck struggling to survive.

The ultimate goal with money success is to be wise with how you spend your money.

If that is something you want to do, then keep reading. You are in the right place.

$17 an Hour is How Much a Year?

When we ran all of our numbers to figure out how much is $17 per hour is annually as a salary, we used the average working day of 40 hours a week.

40 hours x 52 weeks x $17 = $35,360

$35,360 is the gross annual salary with a $17 per hour wage.

As of June 2023, the average hourly wage is $33.58 (source).

Let’s breakdown how that number is calculated.

Typically, the average work week is 40 hours and you can work 52 weeks a year.

Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, multiply the hourly salary of $17 times 2,080 working hours, and the result is $35,360.

Just between $35000 and $36000 is the salary for 17 dollars an hour is how much a year.

That number is the gross income before taxes, insurance, 401K or anything else is taken out. Net income is how much you deposit into your bank account.

Work Part Time?

But you may think, oh wait, I’m only working part time. So if you’re working part time, the assumption is working 20 hours a week at $17 an hour.

Only 20 hours per week?

Then, take 20 hours times 52 weeks and that equals 1,040 working hours. Then, multiply the hourly salary of $17 times 1,040 working hours, and the result is $17,680.

How Much is $17 Per Month?

On average, the monthly amount would average $2,947.

Annual Amount of $35,360 ÷ 12 months = $2,947 per month

Since some months have more days and fewer days like February, you can expect months with more days to have a bigger paycheck.

**Also, this can be heavily influenced by how often you are paid and on which days you get paid.

Work Part Time?

Only 20 hours per week. Then, the monthly amount would average $1,473.

How Much is $17 per Hour Per Week

This is a great number to know!

How much do I make each week? When I roll out of bed and do my job, what can I expect to make at the end of the week?

Once again, the assumption is 40 hours worked.

40 hours x $17 = $680 per week.

Work Part Time?

Only 20 hours per week. Then, the weekly amount would be $340.

Here are jobs that pay weekly.

How Much is $17 per Hour Bi-Weekly

For this calculation, take the average weekly pay of $680 and double it.

$680 per week x 2 = $1,360

Also, the other way to calculate this is:

40 hours x 2 weeks x $17 an hour = $1,360.

Work Part Time?

Only 20 hours per week. Then, the bi-weekly amount would be $680.

How Much is $17 Per Hour Per Day

This depends on how many hours you work in a day. For this example, we are going to use an eight-hour workday.

8 hours x $17 per hour = $136 per day.

If you work 10 hours a day for four days, then you would make $170 per day. (10 hours x $17 per hour)

Work Part Time?

Only 4 hours per day. Then, the daily amount would be $68.

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

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$17 Per Hour is…

$17 per Hour – Full Time	Total Income
Yearly (52 weeks)	$35,360
Yearly (50 weeks)	$34,000
Monthly (173 hours)	$2,947
Weekly (40 Hours)	$680
Bi-Weekly (80 Hours)	$1,360
Daily Wage (8 Hours)	$136
Net Estimated Monthly Income	$2,250

^{**These are assumptions based on simple scenarios.}

Paid Time Off Earning 17 Dollars an Hour

Does your employer offer paid time off?

As an hourly employee, you may or may not get paid time off.

So, here are the scenarios for both cases.

For general purposes, we are going to assume you work 40 hours per week over the course of the year.

Case # 1 – With Paid Time Off

Most hourly employees get two weeks of paid time off which is equivalent to 2 weeks of paid time off.

In this case, you would make $35,360 per year.

This is the same as the example above for an annual salary making $17 per hour.

Case #2 – No Paid Time Off

Unfortunately, not all employers offer paid time off to their hourly employees. While that is unfortunate, it is best to plan for less income.

Life happens. There will be times you need to take time off for numerous reasons – sick time, handling an emergency, or even vacation.

So, let’s assume you take 2 weeks off without paid time off.

That means you would only work 50 weeks of the year instead of all 52 weeks.

Take 40 hours times 50 weeks and that equals 2,000 working hours. Then, multiply the hourly salary of $17 times 2,000 working hours, and the result is $34,000.

40 hours x 50 weeks x $17 = $34,000

You would average $136 per working day and nothing when you don’t work.

$17 an Hour is How Much a year After Taxes

Let’s be honest… Taxes can take up a big chunk of your paycheck. Thus, you need to know how taxes can affect your hourly wage.

Also, every single person’s tax situation is different.

On the basic level, let’s assume a 12% federal tax rate and a 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.

Gross Annual Salary: $35,360

Federal Taxes of 12%: $4,243
State Taxes of 4%: $1,414
Social Security and Medicare of 7.65%: $2,705

$17 an Hour per Year after Taxes: $26,997

This would be your net annual salary after taxes.

To turn that back into an hourly wage, the assumption is working 2,080 hours.

$26,997 ÷ 2,080 hours = $12.98 per hour

After estimated taxes and FICA, you are netting $12.98 an hour. That is $4.02 an hour less than what you planned.

This is a very highlighted example and can vary greatly depending on your personal situation. Therefore, here is a great tool to help you figure out how much your net paycheck would be.

Plus budgeting on $12 an hour is much different.

$17 an Hour Salary

Now, you get to figure out how much you make based on your hours worked or if you make a wage between $17.01-17.99.

This is super helpful if you make $17.25 or $17.75.

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$17 an Hour Budget – Example

You are probably wondering can I live on my own making 17 dollars an hour? How much rent can you afford at 17 an hour?

Using our Cents Plan Formula, this is the best-case scenario on how to budget your $17 per hour paycheck.

When using these percentages, it is best to use net income because taxes must be paid.

In this example, we calculated that $17 an hour was $12.98 after taxes. That would average $2,947 per month.

According to the Cents Plan Formula, here is the high-level view of a $17 per hour budget:

Basic Expenses of 50% = $1,124.89
Save Money of 20% = $449.96
Give Money of 10% = $224.98
Fun Spending of 20% = $449.96
Debt of 0% = $0

Obviously, that is not doable for everyone when living above the poverty line.

So, you have to be strategic in ways to decrease your basic expenses and debt. Then, it will allow you more money to save and fun spending.

Let’s further break down an example budget of $17 per hour using the ideal household percentages. This is extremely helpful and insightful for comparison.

recommended budget percentages based on $17 per hour wage:

Category	Ideal Percentages	Sample Monthly Budget
Giving	10%	$147
Savings	15-25%	$442
Housing	20-30%	$796
Utilities	4-7%	$147
Groceries	5-12%	$236
Clothing	1-4%	$29
Transportation	4-10%	$118
Medical	5-12%	$147
Life Insurance	1%	$15
Education	1-4%	$29
Personal	2-7%	$55
Recreation / Entertainment	3-8%	$88
Debts	0% – Goal	$0
Government Tax (including Income Taxes, Social Security & Medicare)	15-25%	$697
Total Gross Income		$2,947

^**^{In this budget, prioritization was given to basic expenses. Thus, some categories like giving and saving were less.}

A great way to lower your transportation costs is to buy a beater car.

Can I Live off $17 Per Hour?

Even living above the minimum wage by $5-6 can be a very difficult situation.

Is it doable? Absolutely.

You just have to be wiser (or frugal) with your money and how you spend the hard-earned cash you have been blessed with.

A lot of times when people are making under near the minimum wage mark or slightly above, they feel like they are in this constant cycle that they can never keep up.

They are not good enough to make more money.
Feel like they are constantly struggling to keep up with bills and expenses.
And things just keep adding on top.

You need to do is change your money mindset.

This is what you say to yourself… Okay, this is my season of life right now. I have aspirations and goals to change how much I make, but for now, I am going to make sure that I am able to live on my 17 dollars per hour. No going into debt for me.

In the next section, we will dig into ways to increase your income, but for now, is it possible to live on $17 an hour?

Yes, you can do it, and as you can see it is possible with the sample budget of $17 per hour.

Living in a higher cost of living area would be more difficult. So, you may have to get a little creative. For example, you might have to have a roommate. Move to a lower cost of living area where rent is cheaper.

Also, you must evaluate your “fun spending” items. Many of those expenses are not mandatory and will break your budget. You can find plenty of free things to do without spending money.

5 Ways to Increase Your Hourly Wage

This right here is the most important section of this post.

You need to figure out ways to increase your hourly income because I’m going to tell you…you deserve more. You do a good job and your value is higher than what your employers pay you.

Even an increase of 50 cents to $17.50 will add up over the year. An increase to $18 an hour is even better!

1. Ask for a Raise

The first thing to do is ask for a raise. Walk right in and ask for a raise because you never know what the answer will be until you ask.

If you want the best tips on how specifically to ask for a raise and what the average wage is for somebody doing your job, then check out this book.

In this book, the author gives you the exact way to increase your income. The purchase is worth it or go down to the library and check that book out.

2. Look for A New Job

Another way to increase your hourly wage is to look for a new job. Maybe a completely new industry.

It might be a total change for you, but many times, if you want to change your financial situation, then that starts with a career change. Maybe you’re stressed out at work.

Making $17 an hour is too much for you and you’re not able to enjoy life, maybe changing jobs and finding another job may increase your pay, but it will also increase your quality of life.

Maybe pick up an early morning job?

3. Find a New Career

Because of student loans, too many employees feel like they are stuck in the career field they chose. They feel sucked into the job that they don’t like or have the potential they thought it would.

For many years, I was in the same situation until I decided to do a complete career change. I am glad I did. I have the flexibility that I needed in my life to do what I wanted when I needed to do it. Plus I am able to enjoy my entrepreneurial spirit.

It is important to uncover what should I do for a living.

4. Find Alternative Ways to Make Money

In today’s society, you need to find ways to make more money. Period.

There is no way to get around it. You need to find additional income outside a traditional nine to five position or typical 40 hour a week job.

You will reach a point where you are maxed on what you can make in your current position or title. There may be some advancement to move forward, but in many cases, there just is not much room for growth.

So, you need to find a side hustle – another way to make money.

Do something that you enjoy, turn your hobby into a way to make money, turn something that you naturally do, and help others into a service business. In today’s society, the sky is the limit on how you can earn a freelancing income.

5. Earn Passive Income

The last way to increase your hourly wage is to start earning passive income.

This can be from a variety of ways including the stock market, real estate, online courses, book sales, etc. This is where the differentiation between struggling financially and being financially sound.

By earning money passively, you are able to do the things that you enjoy doing and not be loaded down, with having a job that you need to work, and a place that you have to go to. And you still make money doing nothing.

Here is an example:

You can start a brokerage account and start trading stocks for $50. You need to learn and take the one and only investing class I recommend. Learn how the market works, watch videos, and practice in a simulator before you start using your own money.

One gentleman started with $5,000 in his trading account and now has well over $36,000 in a year. Just from practice and being consistent, he has learned that passive income is the way for him to increase his income and also not be a slave to his job.

Tips to Live on 17 an Hour Salary

In this last section, grasp these tips on how to live on $17 an hour. On our site, you can find lots of money saving tips to help stretch your income further.

Here are the most important tips to live on $17 an hour. Highlight these!

1. Spend Less Than You Make

First, you must learn to spend less than you make.

If not you will be caught in the debt cycle and that is not where you want to be. You will be consistently living paycheck to paycheck.

In order to break that dreadful cycle, it means your expenses must be less than your income.

And when I say income, it’s not the $17 an hour.

As we talked about earlier in the post, there are taxes. The amount of taxes taken out of your paycheck is called your net income which is $17 an hour minus all the taxes, FICA, Social Security, and Medicare are taken out. That is your net income.

So, your net income has to be less than your gross income.

2. Living Below Your Means

You need to be happy. And living on less can actually make you happier. Studies prove that less is better.

Finding contentment in life is one thing that is a struggle for most.

We are driven to want the new shiny toy, the thing next door, the stuff your friend or family member got. Our society has trained you that you need these things as well.

Have you ever taken a step back and looked at what you really need?

Once you are able to find contentment with life, then you are going to be set for the long term with your finances.

Here is our story on owning less stuff. We have been happier since.

Learn how to live below your means.

3. Make Saving Money Fun

You need to make saving money fun. If you’re good, since you must keep your expenses low, you have to find ways to make your savings fun!

It could be participating in a no spend challenge for the month.
Participate in the 100 envelope challenge.
It could be challenging friends not to go to Target for a week.
Maybe changing your habits and not picking up takeout and planning meals.
Whatever it is challenge yourself.

Find new ways of saving money and have fun with it.

Even better, get your family and kids involved in the challenge to save money. Tell them the reason why you are saving money and this is what you are doing.

Here are things to do with no money. Free activities without costing you a dime. That is an amazing resource for you and you will never be bored.

And you will learn a lot of things in life you can do for free. Personally, some of the best ones are getting outside and enjoying some fresh air.

4. Make More Money

If you want if you do not settle for less, then find ways to make more money. If you want more out of life, then increase your income.

You need to be an advocate for yourself.

Find ways to make more money.

It could be a side hustle, a second job, asking for a raise, going to school to change careers, or picking up extra hours.

Whatever path you take, that’s fine. Just find ways to make more money. Period.

5. No State Taxes

Paying taxes is one option to increase what you take home in each paycheck.

These are the states that don’t pay state income taxes on wages:

Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

It is very interesting if you take into account the amount of state taxes paid compared to a state with income taxes.

Also, if you live in one of the higher taxed states, then you may want to reconsider moving to a lower cost of living area.

The higher taxes income tax states include California, Hawaii, New Jersey, Oregon, Minnesota, the District of Columbia, New York, Vermont, Iowa, and Wisconsin. These states tax income somewhere between 7.65% – 13.3%.

6. Stick to a Budget

You need to learn how to start a budget. We have tons of budgeting resources for you.

While creating a budget is great, you need to learn how to use one.

You do not have to budget down to every last penny.

You need to make sure your expenses are less than your income and that you are creating sinking funds for those irregular expenses.

Budget Help:

7. Pay Off Debt Quickly

The amount that you pay interest on debt is absolutely absurd.

Unfortunately, that is how many of these companies make their money is from the interest you pay on debt.

If you are paying 5% to even 20-21% or higher, you need to find ways to lower that debt quickly.

Here’s a debt calculator to help you. Figure out your debt free date.

Make that paying off debt fast is your target and main focus. I can tell you from personal experience, that it was not until we paid off our debt that we finally rounded the corner financially. Once our debt was paid off, we could finally be able to save money. Set money aside in separate bank accounts and pay for cash for things.

It took us working hard to pay off debt. We needed persistence and patience while we had setbacks in our debt free journey.

Here are resources now for you to pay off your debt:

Jobs that Pay $17 an Hour

You can find jobs that pay $17 per hour. Polish up that resume, cover letter, and interview skills.

Job Search Hint: Always send a written follow-up thank you note for your interview. That will help you get noticed and remembered.

First, look at the cities that require a minimum wage in their cities. That is the best place to start to find jobs that are going to pay higher than the federal minimum wage rate. Many of the cities are moving towards this model so, target and look for jobs in those areas.

Possible Ideas:

Administrative assistant
Customer service representatives
Housecleaning specialist
Delivery drivers
Warehouse workers
Companies that pay more than $17 per hour: Charter Communications, Wells Fargo, Bank of America, JP Morgan. (there are more in HCOL areas only)

$17 Per Hour Annual Salary

In this post, we detailed 17 an hour is how much a year. Plus all of the variables that can impact your net income.

17 dollars an hour is how much a year…

$35,360

This is just above $35,000 per year. In this post, we highlighted ways to increase your income as well as tips for living off your wage.

Use the sample budget as a starting point with your expenses.

You will have to be savvy and wise with your hard-earned income. But, with a plan, anything is possible!

Learn exactly how much do I make per year…

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

June 17, 2024 by Brett Tams

MSR Valuation, Non-QM, VOIE, Online Auction, Broker to Banker Tools; Webinars, Events, and Training

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MSR Valuation, Non-QM, VOIE, Online Auction, Broker to Banker Tools; Webinars, Events, and Training

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Rob Chrisman

Thu, Jun 13 2024, 11:42 AM

This morning I head to Chicago, IL, a state with 972 licensed mortgage banking companies. Illinois has had its share of severe storm damage (heck, in Sarasota we just had upwards of 10 inches of rain in about 12 hours), and may be joining the ranks of places in the U.S. where the cost of insurance passes the cost of property tax. Coach a borrower through that! The cost and availability of homeowner’s insurance is a big topic in Florida, as is the PACE program. Florida is one of three states (with California and Missouri) that offer this loan program for clean energy. The Florida legislature put some consumer protection provisions into the program, but for various reasons mortgage organizations like the MBAF were sorry to see the bill pass and are working on a veto. For instance, these loans are put into first priority ahead of the homeowner’s mortgage (no one wants to read “predatory” when it comes to any program), and what lender or servicer needs that? (Today’s podcast is found here, and this week’s are sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, cybersecurity, technology, and other services to the mortgage industry. Hear an interview with Richey May’s Michael Nougier on best practices for companies to put in place regarding preventing and reporting cybersecurity breaches.)

Software, Products, and Services for Lenders and Brokers

Interest rates are now double where they were in 2022. Tipping over 8 percent at the end of 2023 and hanging in the 7 percent range nearly all of this year, the current interest rate environment is not helping delinquent homeowners. Gone are the days when modifying your mortgage payment was supported by dropping the interest rate. There is a solution. FHA’s Payment Supplement program doesn’t change the terms of the first mortgage. Read Clarifire’s recent blog, “Servicing Answers to High Interest Rate Pressures,” to find out the details of this solution, along with how old pitfalls could impact your implementation of this program and future loss mitigation options. Don’t let old automation cripple your success. Make sure you’re in a position to help your distressed borrowers navigate economic volatility and avoid default with CLARIFIRE ®, a modern, intelligent innovation that’s truly BRIGHTER AUTOMATION®.

National Homeownership Month presents a prime opportunity for the mortgage business. MortgageFlex executives advise lenders to focus on prequalification to engage potential buyers and start conversations about affordable homeownership. The MortgageFlexONE LOS offers borrower-facing tools and direct CRM access to help lenders engage with prospective buyers and jumpstart the sales process. This proactive approach can instill the dream of homeownership in potential buyers’ minds and expand a lender’s client base. To learn more about the tools driving success in today’s market and how to build your business, reach out to John McCrea.

On the heels of the MBA Secondary in NY and almost 100 client meetings, the AmeriHome team wants you to know that they are listening. Based on client feedback, AmeriHome will focus on developing the products and services that its clients need. To enable that, AmeriHome is hiring in several key areas, including underwriters and a Salesforce Admin! Check out the Careers page for details on all open jobs. If you’re a mortgage broker wanting to leverage the advantages of being a banker but are hesitant because of the complexities and risk associated with compliance and closing documentation, AmeriHome’s Emerging Banker program makes it easy with its new Initial Disclosure and Closing Documents Program! Demand is also increasing for Warehouse Lines, MSR financing and Treasury Management Services offered through its relationship with Western Alliance Bank: click for details. Check out AmeriHome’s Upcoming Events, find your sales rep here, or email them to find out more about what AmeriHome can do for you!

For more than 20 years, RealtyBid has had one focus: bringing buyers and sellers together. Today, the online auction marketplace has become the go-to for exciting real estate buying opportunities and an unsurpassed disposition strategy for sellers. With support from a knowledgeable and experienced staff, RealtyBid’s technology makes real estate transactions less cumbersome and more cost effective for all parties. The RealtyBid platform sets a new standard for online real estate auctions. Check out the new look and learn more about the new enhanced features that just rolled out this month here.

“Truv is the only consumer-permissioned VOIE platform approved with both GSEs, solidifying our commitment to delivering top-notch verification services tailored for mortgage lenders, banks, and credit unions. What does this mean for your business? Faster turn times, lower buyback risks, compliance assurance, and reduced operational costs. Read about why this matters for your business here.”

Cookie-cutter solutions no longer cut it. In today’s market, look for non-conventional financing from an industry leader like Flagstar Bank. Flagstar offers three competitively priced non-QM products: Advantage Bank Statement, Advantage, and Advantage Plus loans. Advantage Bank Statement features flexible qualifying guidelines based on 12 months of bank statements, making it a great choice for self-employed borrowers. The other two, Advantage and Advantage Plus, offer 12-month seasoning on derogatory events, 1-year income documentation, asset depletion, and unlimited cash-outs. Flagstar delivers in the non-QM space, with LTVs up to 90%, loan limits from $100,000 to $3 million, and flexible guidelines, including up to 55% DTI. Looking for a government loan? Flagstar has been doing them since its earliest days. Take advantage of their seasoned government underwriting specialists and limited-time LLPA reductions for no-score borrowers. For almost four decades, Flagstar has provided smart lending solutions to its broker partners, and, with $113 billion in assets, they have the strength and resources you can rely on. Start a conversation with your AE today, or click here to learn more.

Events, Training, and Webinars Through Next Week

Over the last three months, the Optimal Blue Mortgage Market Indices has seen an increase of 45 bps, followed by a 25-bps decrease to 6.91 on June 5. This fluctuation is an indication that the rate market has experienced increased volatility over the last quarter. Market volatility makes hedging profit margins significantly more challenging, which can result in your hedge underperforming, impacting profit margins even further. To learn more about advanced hedging concepts, join the Hedging 201 webinar led by Optimal Blue experts on June 18 at 1 p.m. CT. This session will cover essential topics such as pull-through rates, the impact of clean data on your model, loan sale best practices, duration models, as well as position and gain/loss reconciliation. Secure your spot for the Hedging 201 webinar today to gain valuable insights on hedging in a volatile market.

Join Curinos on Jun 18th at 1pm CT for an insightful webinar on margin-management strategies to optimize your mortgage market position, sustain competitive advantage and maximize profitability. In this session, we’ll explore key metrics and methodologies for understanding your current market position, identifying optimal pricing strategies and maintaining a strong go-to-market framework. Whether you’re a seasoned margin-management professional or only peripherally involved in pricing decisions, this webinar offers valuable insights and practical pointers to help you navigate market complexities and achieve sustainable success. Reserve your spot now!

A good place for longer term conference planning is to start is here, and click on “Conference List” for in-person events in the future.

Today will be another episode of The Big Picture at 3PM ET, Rich Swerbinsky is interviewing the esteemed Jodi Hall about all things mortgage.

Simplify the process of reverse mortgages with the Plaza Home Mortgage live session on Thursday, June 13, 11:00 AM PT / 2:00 PM ET featuring Mark Reeve, Vice President of Plaza’s Reverse Mortgage Division.

Join CoAMP and Advantage Credit on June 13th, 5-7 PM at Sheraton DTC for a fun filled Happy Hour that includes networking and an update on current credit issues/practices by Dena Falbo w/Advantage Credit. Admission is free, there will be food and beverages for purchase.

Friday the 14th will see an episode of The Mortgage Collaborative’s Rundown with Melissa Langdale and me covering current events in the mortgage market for 30 minutes starting at noon PT, 3PM ET. We have Austin Lampson who was just highlighted as one of the top 5 female loan originators in the country in 2023 and have been in the top 1 percent of loan originators since 2014!

On June 17, 9:00 AM – 4:00 PM (Eastern), FHA is offering a free, in-person FHA Appraisal Training in Nashville, TN. This training will take an in-depth look at a variety of appraisal-related topics including property acceptability criteria; minimum property requirements; property defects; appraiser responsibilities and requirements.

It’s that time again, Pensford’s Q2 Interest Rate Webinar with JP Conklin takes place June 18th at 1:00pm ET. Topics of discussion include fixed and floating rate forecasts, rate cuts in 2024, hedging costs and strategies, soft landing or recession, disinflation and labor market weakness.

FHA Credit Underwriting Training in Nashville, TN, June 18, 9:00 AM – 4:00 PM (Eastern). This free, in-person training will provide an overview of FHA underwriting procedures and take an in-depth look at a variety of topics including credit, income, and asset (CIA) documentation; manual underwriting; automated underwriting systems (AUS); closing; and more.

Your 2024 Midpoint Reset with Dr. Bruce Lund, June 18th at 2pm ET.

Learn more about HFA Advantage’s features and benefits, eligibility and homebuyer education requirements and new product enhancements, register for a Freddie Mac complimentary webinar on Tuesday, June 18, 2:00 PM -3:30 PM (EST). You’ll also learn more about DPA One®, a new online platform developed to help lenders and loan officers find and match their borrowers to eligible down payment assistance programs through a single, online access point.

Join Texas Mortgage Bankers Association on Thursday, June 20 at 11:30 am – 12:30 pm for an insightful and impactful webinar on Strategies for Growing Builder Business with Nicollette Chapman, Senior Vice President of the Mortgage Division at Zonda, and moderated by Bryan Walker, Director of Business Development at Zonda.

June 20-21, in the one and only Honolulu, the MBAH’s annual conference will take place! No neckties required!

Join TMBA for an insightful and impactful webinar on Strategies for Growing Builder Business, June 20th from 11:30 am – 12:30 pm, with Nicollette Chapman, Senior Vice President of the Mortgage Division at Zonda, and moderated by Bryan Walker, Director of Business Development at Zonda.

FHA’s Office of Single Family Housing, in collaboration with the Department of Housing and Urban Development’s (HUD) Office of Housing Counseling announced the availability of its new, pre-recorded webinar, Overview of Resources for First-Time Homebuyers. For both program participants and prospective homebuyers, this free webinar addresses some key home buying myths, provides an overview of FHA single family mortgage programs, and offers guidance on working with HUD-approved housing counseling agencies. Read HUD’s press release for more information.

The Non-QM Town Hall is back bringing you a deep dive into the market dynamics of Non-QM, sharing secondary market updates, providing insights for seasoned Non-QM professionals, and exploring strategies for newcomers. This Town Hall format fosters an interactive dialogue with our featured Non-QM leaders. The first session is Thursday, June 20 with the State of Non-QM, followed by two sessions aimed at Non-QM’s primary audiences: Business Owners in July and Real Estate Investors in August. Sign up here.

Capital Markets

MCT and Lender Price announced today that they have joined forces to improve mortgage pricing with loan-level MSR values. MCT’s MSR grids now allow Lender Price PPE clients to be more granular, profitable, and efficient when generating their front-end borrower pricing and managing their MSR portfolio. “Lender Price has shown a commitment to providing the top-performing pricing experience for mortgage lenders by integrating the industry’s most granular MSR values,” said Curtis Richins, president and CEO of MCT. Mortgage lenders will save time and money through faster and more strategic best execution decisions, dynamic margin management, and stronger pricing analytics, all in one enterprise pricing engine. “Our collaboration with MCT marks a significant milestone in our mission to provide lenders with innovative tools,” said Dawar Alimi, CEO and Co-Founder of Lender Price. Read the full press release to learn more about this partnership and the advancements improving performance for mortgage lenders.

For you capital markets nerds, Freddie Mac announced it will voluntarily delist its last remaining security trading on the New York Stock Exchange (NYSE). The bond, Debt Securities Due 2025 (CUSIP 3134A2HG6), trades under ticker symbol FMCC. It was issued in 1998. Freddie Mac will take all necessary steps to delist the bond, including filing a Form 25 with the Securities and Exchange Commission and the NYSE after the ten-day notice period has elapsed. Freddie Mac has not arranged for listing and/or registration of the bond on another national securities exchange or for its quotation in a quotation medium. Freddie Mac expects the last day of trading to be on or around July 1. Freddie Mac voluntarily delisted its common stock from the NYSE in 2010 at the direction of its conservator, the Federal Housing Finance Agency. The continued listing of this bond would subject Freddie Mac to rules and administration that are unnecessary given its status in government conservatorship.

Yesterday, Guaranteed Rate, the second-largest retail mortgage lender in the United States, announced the launch of its first Residential Mortgage-Backed Securities (RMBS) deal of 2024, marking the company as the first 100 percent retail non-bank lender to re-enter the securitization space with a Prime Jumbo deal since the pandemic. “This deal highlights the shift in strategy Guaranteed Rate has implemented to prove its commitment to offering robust financial solutions regardless of market conditions. By providing a new outlet for liquidity, the company is doubling down on supporting the industry and its borrowers while banks are exiting the mortgage lending space due to new regulations.”

Yesterday was quite a pivotal day for markets with both the latest CPI inflation reading and FOMC rate decision. May’s inflation data came in softer than expected (good news for the Fed), though the Federal Open Market Committee unanimously voted to leave the federal funds rate target range unchanged at 5.25-5.50 percent. The FOMC is now projecting only one rate cut in 2024, with some participants believing there will be two cuts, compared to the consensus three rate cuts predicted this year at the March meeting. The FOMC also moved up its projection for the terminal rate, reinforcing policymakers’ public calls to keep borrowing costs higher for longer to suppress inflation. For those keeping track, headline CPI was unchanged in the month, the first flat reading since July 2022. Core CPI increased by 0.2 percent, the smallest increase since August 2021.

PPI (-2. percent) and weekly jobless claims (242k) kicked off today’s economic calendar. Later today brings several Treasury auctions that will be headlined by reopened 20-year bonds, 5-year TIPS, and reopened 30-year bonds, Freddie Mac’s Primary Mortgage Market Survey, and Fedspeak resumes with New York Fed President Williams delivering remarks. We begin the day with Agency MBS prices better by about .125 from Wednesday’s close, the 10-year yielding 4.26 after closing yesterday at 4.30 percent, and the 2-year at 4.68 after continued inflation news.

Board Member Wanted

The American Credit Union Mortgage Association (ACUMA) is seeking a volunteer board member to join the association’s governing Board of Directors and provide guidance to it and ACUMA on how best to serve its growing membership. “ACUMA is a non-profit association dedicated to advancing mortgage lending opportunities and practices within credit unions. The ACUMA Board of Directors, numbering nine volunteers, sets the association’s governance and provides guidance to the ACUMA President. Board members each serve three-year terms, staggered to maintain experience and continuity while gaining access to new ideas and guidance. Among other things, to be eligible for a full or associate board position the candidate must be employed at an ACUMA member credit union or CUSO. Submit your resume with a request for consideration to ACUMA board member Pam Davis.

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Source: mortgagenewsdaily.com

Apache is functioning normally

June 17, 2024 by Brett Tams

Key Fed inflation metric expected to drop June 28 following unexpected decline in May wholesale prices and jump in jobless claims to highest level since August 2023.

At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.

Federal Reserve policymakers said Wednesday they wanted more evidence that inflation is subsiding before cutting interest rates. A day later, they get some.

Two reports out Thursday showed May jobless claims jumped to their highest level since August 2023 and that wholesale prices unexpectedly dropped last month.

An estimated 242,000 workers filed initial claims for unemployment insurance during the week ending June 8, the Department of Labor reported, up 13,000 from the week before and close to 20,000 more claims than forecast by economists.

Initial jobless claims surge

“Initial claims have been drifting up for some time, but the big increase this week leaves the uptrend far harder to dismiss,” Pantheon Macroeconomics Senior U.S. Economist Oliver Allen said in a note to clients.

Oliver Allen

“High long-term rates, tight credit conditions and a gradual softening in demand are starting to weigh more heavily on businesses, and on small companies in particular,” Allen said. “Greater layoffs will probably mean that the labor market starts to look a lot weaker very soon, especially when combined with the meaningful slowdown in gross hiring suggested by most of the business surveys.”

Thursday’s wholesale prices report, formally known as the Producer Price Index (PPI), tracks demand, prices and profit margins for goods ranging from diesel fuel to eggs and services like freight and cargo transportation.

The PPI for final demand fell by a seasonally adjusted 0.2 percent in May, the Bureau of Labor Statistics reported Thursday. Economists had expected headline PPI to moderate from the 0.5 percent increase registered in April but projected the index would still manage to eke out 0.1 percent growth in May.

Bond market investors — who had already sent mortgage rates plummeting Wednesday after the latest Consumer Price Index reading showed inflation easing in May — kept the rally going Thursday, bringing 10-year Treasury yields down another 6 basis points.

Mortgage rates trending down

Rates for 30-year fixed-rate mortgages, which are largely determined by investor demand for mortgage-backed securities, dropped 14 basis points on Wednesday, to 6.84 percent, according to rate lock data tracked by Optimal Blue. A basis point is one-hundredth of a percentage point.

That’s a 43 basis-point drop from a 2024 high of 7.27 percent registered April 25, and mortgage rates are likely to keep tracking down with 10-year Treasury yields, a barometer for mortgage rates. An index maintained by Mortgage News Daily showed rates for 30-year fixed-rate loans eased again on Thursday, but only by a single basis point.

Key Fed inflation metric set to drop June 28

But mortgage rates have now come down nearly half a percentage point from this year’s highs — and could be poised for another big drop when the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, is updated on June 28.

CPI and PPI are key components of the PCE price index. Now that the latest CPI and PPI numbers are out, forecasters at Pantheon Macroeconomics have run the numbers for what core PCE — which excludes food and energy costs — might look like when the numbers for May are released in two weeks.

Fed policymakers took some of the momentum out of Wednesday’s CPI-fueled bond rally when they released economic projections indicating that they only expect to cut rates once this year, by 25 basis points. The Fed wants to see more evidence that inflation is moving toward its 2 percent annual target before cutting rates more drastically, Chair Jerome Powell said.

The Fed’s latest forecasts imply they expect core PCE to rise at an average pace of 0.19 percent each month from May through December, Pantheon Macroeconomics Chief Economist Ian Shepherdson said in a note to clients Thursday.

But Pantheon’s mapping of PPI and CPI data suggests core PCE increased by just 0.11 percent in May — a drastic slowdown from the 0.32 percent average increase in the first four months of 2024.

Ian Shepherdson

“We don’t know what policymakers specifically penciled in for May, but our estimate points to a material downside surprise,” Shepherdson said. “Meanwhile, the outlook for slower rent gains, falling wage inflation, and margin compression at retailers suggests that the core PCE deflator will continue to rise more slowly than the Fed predicted this week, laying the foundations for the first rate cut to come in September and multiple easings this year.”

When last updated, the full PCE index was up 0.26 percent from March to April, and 2.65 percent from a year ago. That’s much closer to the Fed’s 2 percent inflation target than in June 2022, when inflation peaked at 7.12 percent.

Pantheon Macroeconomics forecasters predict the Fed will ultimately cut the short-term federal funds rate by 1.25 percentage points this year, starting with a 25 basis-point cut in September followed by 50 basis-point reductions in November and December.

While that’s more aggressive than many forecasts, futures markets tracked by the CME FedWatch tool on Thursday put the odds of two or more Fed rate cuts by the end of the year at 71 percent, up from 53 percent on May 13.

Get Inman’s Mortgage Brief Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.

Email Matt Carter

Source: inman.com

Apache is functioning normally

June 17, 2024 by Brett Tams

Rate-and-term refinances rose 25.6% in May as mortgage rates trended down, according to a new report by Optimal Blue. The spike was a response to a modest drop in the 30-year conforming mortgage rate, which dropped to 6.8% on May 15 but ultimately ended the month at 7.02% on the Optimal Blue Mortgage Market Indices (OBMMI).

“The sharp increase in demand for rate-and-term refinances following a dip in rates indicates that homeowners with rates above 7% feel pinched and are sensitive to even modest interest rate movements in the current economic landscape,” Brennan O’Connell, director of data solutions at Optimal Blue, said in a prepared statement. “For context, since Optimal Blue began tracking the 30-year conforming rate as a market index in January 2017, interest rates only exceeded 7.02% on 120 market days. Based on other measures, buyers who locked loans on those days have the highest mortgage rates of the past two decades.”

Chart courtesy of Optimal Blue

Total volume rose by 5.3% in May month over month and 1.8% year over year. Such gains were driven by a 4.1% increase in month-over-month purchase lock volume, a 7.2% rise in cash-out refinances, and the big rise in rate-and-term refinances. There was, however, a year-over-year decline in purchase lock counts, a “key market health indicator that controls for home price appreciation and refinance volatility, were down 4% year-over-year.”

Despite the 25.6% monthly increase from April, rate-term refinances remained at a value of 6 on the market volume index (total volume indexed to 100 in January 2018). Cash-out refinances were 9 and purchase mortgages registered at 94.

Conforming loans were 57.2% of the pie, with FHA at 18.4%, VA at 10.8% and nonconforming loans at 13.0%, according to Optimal Blue data.

The purchase pull-through rate was 79.9% in May, down 184 bps from April. The refinance pull-through rate was 59.4% in May, down 115 basis points from April and 295 bps from February. In May 2023, the refi pull-through rate was about 65%.

Nationally, markets in the Northeast showed the largest increase in lock volume, according to Optimal Blue. The Boston-Cambridge-Newton, MA-NH metro had a 17.8% increase in rate locks and the New York-Newark-Jersey City metro wasn’t far behind at 16.4%.

The Washington, D.C., Dallas, Denver, Miami and Phoenix metros all showed declines in lock volume in May.

Chart courtesy of Optimal Blue

The average loan amount in May remained flat at $374,500 and the average home purchase price rose for the fifth consecutive month to $480,300 from $477,900.

Apache is functioning normally

June 17, 2024 by Brett Tams

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How Fed Rates Influence Mortgages, Credit Cards and More

Higher rates benefit those who can save, but for borrowers falling rates would reduce bills on credit cards, home equity loans and other forms of debt.

New home construction in Draper, Utah. For aspiring homeowners who have been sidelined by higher interest rates, a lower-rate environment can’t come soon enough.Credit…Kim Raff for The New York Times

June 12, 2024

American households who are hoping interest rates will soon decline will have to wait a bit longer.

The Federal Reserve is expected to keep its benchmark interest rate unchanged on Wednesday, at least until there are clearer signs that inflation is growing more slowly. But forecasters will be listening to Jerome H. Powell, the Fed chair, for any clues about how much longer they expect to keep rates at relatively high levels.

The central bank has raised its key interest rate to 5.33 percent from near zero in a series of increases between March 2022 and last summer, and they’ve remained unchanged since then. The goal was to tamp down inflation, which has cooled considerably, but it is still higher than the Fed would like, suggesting that interest rates could remain high for longer than economists had previously expected.

For people with money stashed away in higher-yielding savings accounts, a continuation of elevated rates translates into more interest earnings. But for people saddled with high cost credit card debt, or aspiring homeowners who have been sidelined by higher interest rates, a lower-rate environment can’t come soon enough.

“Shopping around, whether you’re looking for an auto loan, a credit card, a personal loan or any other type of loan, can make a huge difference,” said Matt Schulz, an analyst at LendingTree, an online loan marketplace.

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