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Apache is functioning normally

June 1, 2023 by Brett Tams

Interested in a 40-Year Fixed Mortgage?

If you need even more time to pay off your mortgage
Or need to get the monthly payment down to boost affordability
A 40-year fixed mortgage could be one alternative to consider
But they’re harder to come by these days and aren’t well-suited for everyone

Every now and then, I take a look at a specific mortgage product to determine if it could be a good fit for a prospective (or existing) homeowner.

Today, we’ll discuss a formerly popular home loan option, the “40-year mortgage.” It was all the rage during the prior housing boom in the early 2000s.

But also partially to blame for the housing crisis that took place shortly after.

Still, with mortgage rates now double what they were to start the year, they could make a resurgence.

What Is a 40-Year Mortgage?

A 40-year mortgage is a home loan with a loan term that lasts for 40 years. This is 10 years longer than the typical 30-year loan term attached to most mortgages.

You may already be thinking, “40 years? I thought mortgages had terms of 30 years?” Is this a mistake?

Well, you’d be mostly right. The majority of mortgages issued today do have terms of 30 years. It’s certainly the most common loan term out there.

In fact, aside from 30-year fixed mortgages, which clearly last for 30 years, as the name implies, most adjustable-rate mortgages also have terms of 30 years, despite lacking any reference to 30 years in their title.

So that 5/1 ARM or 7/1 ARM you’ve got your eye on still has a 30-year term, meaning it’s fixed for the first five or seven years.

It then becomes adjustable for the remaining 25 or 23 years, respectively. This is one reason why consumers have a great amount of difficulty understanding mortgages.

Only the 15-year mortgage and 10-year fixed come with different loan terms, 15 and 10 years respectively.

Why Go With a 40-Year Mortgage Term?

It’s an extra 10 years over the typical 30-year loan term
Offered as a means to lower monthly mortgage payments
This can make the home loan more affordable or allow money to allocated elsewhere
But it will also lead to a lot more interest paid over the longer term (and a slower payoff)

Okay, so we know the 40-year mortgage bucks the trend, and adds 10 years on to the standard mortgage term. But why?

What’s the point of paying a mortgage for an extra decade? That sounds like a literal lifetime commitment. Especially since 30 years is already way too long.

Well, the longer a mortgage amortizes (is paid off), the lower the monthly mortgage payment.

Essentially, payments are stretched out over a longer period of time. Instead of 360 months, you’re looking at 480 months.

Let’s look at an example of a 40-year fixed mortgage:

Loan amount: $300,000
30-year fixed: $1,703.37 @5.5%
40-year fixed: $1,598.66 @5.75%

As you can see, the monthly mortgage payment on the 40-year mortgage is roughly $105 less each month thanks to that longer period of time to pay it off.

That extra cash could be used to pay off student loans, credit cards, personal loans, and other higher-APR debt you may have.

Or it could be allocated toward a different investment or retirement account. It could also make a real estate purchase slightly more affordable.

The bad news is you’ll pay much more interest over the life of the loan, and it’ll take a very long time to build a meaningful amount of home equity.

If you use a mortgage calculator, make sure it’s set at 480 months. And pay close attention to how much interest is paid versus a loan with a term of 360 months. It’ll be an eye-opener.

In the example above, it’s about $150,000 more in interest for the 40-year mortgage, assuming it’s held until maturity.

40-Year Mortgage Rates Are Slightly Higher

Expect 40-year mortgage rates to be slightly higher than interest rates on 30-year fixed mortgages
How much higher will depend on the lender in question and your unique loan scenario
You essentially pay a premium to lock in an interest rate for an additional 10 years
And the slower payoff means you must pay a higher rate of interest to the bank/lender

You may have also noticed that the mortgage rate on the 40-year mortgage in my example is 0.25% higher than the interest rate on the 30-year fixed. There’s a reason for that.

Simply put, you pay a premium for a longer amortization period. This is the opposite of a 15-year fixed, where you receive a discount for paying your mortgage off faster.

After all, a bank or lender is willing to give you a fixed rate for four decades, so they’re going to want a slight premium in exchange for all that uncertainty.

In other words, expect 40-year mortgage rates to be slightly more expensive. It might only be .125% higher than the 30-year, but could definitely range from bank to bank. The bigger problem is finding a lender that offers the product to begin with.

That being said, the short-term savings can increase how much house a buyer can afford, and also make qualifying easier (or even feasible) if a borrower’s debt-to-income ratio is too high for a 30-year mortgage. That’s assuming the lender qualifies the borrower at the 40-year loan payment…

This is essentially why a borrower would go with the 40-year fixed – to buy more house or make their home loan more “affordable.”

More aggressive borrowers could even invest that $105 each month in a high-yielding retirement account and essentially try to beat the relatively low interest rate on their mortgage.

Nowadays, a 40-year mortgage term may even be part of a loan modification program to make payments more affordable for a struggling borrower.

When combined with an interest rate cut on their current mortgage, the combo can help a borrower stay put in their home for the long haul.

The Downsides of a 40-Year Mortgage

Loan is paid much back slower (harder to build equity)
Most of the mortgage payment consists of interest
May not be much cheaper than a 30-year fixed when all is said and done
And they’re not easy to find these days but that could change if rates remain elevated

While the benefits of a 40-year mortgage sound good, a borrower who chooses to go with a such a loan is paying a premium to do so.

As mentioned, they are higher-rate home loans, so that cuts into the payment “discount” afforded by a 40-year mortgage.

And while the monthly mortgage payment might be lower, the total interest paid over the full loan term will be much higher, which makes one question whether $100 or so in monthly savings is worth it.

On smaller mortgages, the payment different will be even more negligible. It may also be difficult to find a 40-year mortgage, since not all lenders offer them.

In fact, the Qualified Mortgage rule outlawed loan terms longer than 30 years, so 40-year mortgages aren’t even QM-compliant.

That means you’ll probably need to go with a specialty mortgage lender or portfolio lender if you want one.

Additionally, a longer amortization period means you’ll build home equity a lot slower, which could prove to be an issue if you need to sell your home or refinance in the future and your loan-to-value ratio is still sky-high. This could be the case if you come in with a low down payment.

Some Benefits to a 40-Year Mortgage

Could be a good short-term solution if you need monthly payment relief
Or if you don’t plan on staying in the property for very long
Those who wish to use their money elsewhere might be attracted to the program
But keep in mind that you pay for the privilege of a longer term via a higher interest rate

One could argue that most homeowners don’t stick with their mortgage full term anyway, let alone for 10 years, so why pay more each month? Or worry that it’ll take forever to pay it off?

A 40-year mortgage could also serve as a good alternative to an interest-only home loan, the latter of which won’t build any equity, and could eventually land a homeowner in an underwater position.

These mortgage types are also safer than an ARM (assuming it’s a 40-year fixed rate), which can adjust higher once the fixed period comes to an end.

So you won’t have to contend with any interest rate adjustments, which could make it easier to sleep at night, especially if you’re a first-time home buyer.

As always, do plenty of homework (and math using a mortgage calculator) and consult with a loan officer or mortgage broker to determine what’s best for you and your unique situation.

Tip: You may come across a “40 due in 30” as well, which is essentially a 30-year balloon mortgage that amortizes like it has a 40-year term.

That keeps monthly payments low, but the balance due at 30-year mark. Again, most of these probably aren’t kept full term, so it might be moot.

Is a 40-Year Mortgage a Good Idea?

Some say you should only buy a house if you can afford a 15-year mortgage. So if we’re talking a 40-year mortgage, which is 10 years beyond the standard 30-year fixed, it might be a red flag.

It may reveal that you aren’t qualified for the mortgage in question, at least from a traditional, more conservative standpoint.

Of course, there are exceptions to every rule, and it depends why a homeowner would seek out this type of financing.

They might want to deploy their cash in other places where its yield is higher than the rate on a 40-year mortgage.

At the same time, for the typical home buyer, a 40-year loan probably isn’t the best idea because so much more interest is paid throughout the loan term.

And it takes a significant amount of time to pay off the loan. But every situation is unique.

Are 40-Year Mortgages Available?

One last thing. As noted above, you might have difficulty finding a 40-year mortgage because not many lenders offer them.

So they might not even be available to begin with, which stops the debate in its tracks. Before you spend too much time thinking about getting one, maybe see if anyone offers them.

The reason they’re scarce is mostly because the Consumer Financial Protection Bureau (CFPB) outlawed loan terms beyond 30 years on most residential home loans.

You can still get one, but it won’t be considered a Qualified Mortgage (QM). And only big banks and niche non-QM lenders offer such products, typically at a premium.

So even if you find one, the pricing might not be great given the lack of competition. At the end of the day, you might be better off with a more traditional loan program instead.

(photo: Derek Swanson)

Source: thetruthaboutmortgage.com

Apache is functioning normally

June 1, 2023 by Brett Tams

If you’re curious who the top mortgage lenders in Arizona are, you’ve come to the right place.

I’ve compiled several top-10 lists for overall volume, home purchase volume, and refinance volume.

Interestingly, a wholesale mortgage lender actually topped the overall list in 2021 (the latest year available).

That’s impressive given the fact that wholesale lenders only work with mortgage brokers, as opposed to retail lenders that are consumer-facing.

Anyway, the lender in question was United Wholesale Mortgage, or UWM for short, with a solid $12.1 billion. Read on to find out who the other big players were.

Top Mortgage Lenders in Arizona (Overall)

Ranking	Company Name	2021 Loan Volume
1.	United Wholesale Mortgage	$12.1 billion
2.	Rocket Mortgage	$11.5 billion
3.	Chase	$6.6 billion
4.	Fairway Independent	$6.3 billion
5.	loanDepot	$5.4 billion
6.	Wells Fargo	$5.4 billion
7.	Nova Home Loans	$4.8 billion
8.	U.S. Bank	$4.8 billion
9.	Freedom Mortgage	$4.0 billion
10.	Pennymac	$3.8 billion

As noted, UWM topped the charts in the Copper State with over $12 billion in home loan volume, beating out its crosstown rival Rocket Mortgage, per HMDA data from Richey May.

Rocket mustered an also impressive $11.5 billion in home loan origination volume, beating out third place Chase’s $6.6 billion quite easily.

Also in the top five were Fairway Independent Mortgage with $6.3 billion, and loanDepot with $5.4 billion.

The rest of the top-10 also consisted of big national mortgage brands, other than Nova Home Loans, which is actually an independent mortgage banker based in Arizona.

They came in 7th with a healthy $4.8 billion in loan volume, beating out U.S. Bank, Freedom Mortgage, and Pennymac.

Wells Fargo snagged sixth place with $5.4 billion, pretty strong despite ongoing headwinds at the company.

Top Mortgage Lenders in Arizona (for Home Purchase Loans)

Ranking	Company Name	2021 Loan Volume
1.	UWM	$4.2 billion
2.	Fairway Independent	$3.8 billion
3.	U.S. Bank	$2.9 billion
4.	Chase	$2.8 billion
5.	Nova Home Loans	$2.3 billion
6.	Wells Fargo	$2.1 billion
7.	loanDepot	$2.1 billion
8.	Rocket Mortgage	$1.9 billion
9.	Lakeview Loan Servicing	$1.5 billion
10.	VIP Mortgage	$1.4 billion

Now let’s turn our attention to home purchase lending, which has become all the rage since mortgage rates practically doubled.

The top Arizona mortgage lender for home purchase loans was also UWM with $4.2 billion funded.

This time they held off second place Fairway Independent Mortgage, which originated a respectable $3.8 billion in State 48.

Coming in third was depository U.S. Bank with $2.9 billion, followed by fellow bank Chase with $2.8 billion.

In fifth was Arizona’s very own Nova Home Loans with $2.3 billion. If you live there, you’ve undoubtedly seen their many billboards along the freeway.

Others in the top 10 included Wells Fargo, loanDepot, Rocket Mortgage, Lakeview Loan Servicing, and another Arizona-based mortgage lender, VIP Mortgage.

This is an important list to watch for 2022 as the market shifts to purchase vs. refinance lending.

Those who remain on it will be the winners in the mortgage space in what otherwise might be a tough year.

Top Mortgage Lenders in Arizona (for Home Refinance Loans)

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$9.5 billion
2.	UWM	$8.0 billion
3.	Chase	$3.6 billion
4.	Freedom Mortgage	$3.5 billion
5.	loanDepot	$3.4 billion
6.	Wells Fargo	$3.1 billion
7.	Nova Home Loans	$2.5 billion
8.	Pennymac	$2.5 billion
9.	Fairway Independent	$2.5 billion
10.	Mr. Cooper	$2.4 billion

Now let’s crown a king of refinance loans. If you guessed Rocket Mortgage, you won.

The nation’s number one mortgage lender did $9.5 billion in refis in Arizona last year.

That was well above second place UWM’s $8 billion, and in a different galaxy than third place Chase’s $3.6 billion.

Nonbank lenders Freedom Mortgage and loanDepot took fourth and fifth, respectively, with $3.5 and $3.4 billion.

Others in the top 10 included repeats Wells Fargo, Nova Home Loans, Pennymac, and Fairway Independent, along with Mr. Cooper (formerly Nationstar).

So it appears the top-10 mortgage lenders in Arizona is fairly concentrated among a small group of big names.

Top Mortgage Lenders in Phoenix

Ranking	Company Name	2021 Loan Volume
1.	UWM	$10.6 billion
2.	Rocket Mortgage	$9.2 billion
3.	Chase	$5.3 billion
4.	Fairway Independent	$4.9 billion
5.	loanDepot	$4.3 billion
6.	Wells Fargo	$3.9 billion
7.	U.S. Bank	$3.7 billion
8.	Freedom Mortgage	$2.9 billion
9.	Pennymac	$2.6 billion
10.	Mr. Cooper	$2.5 billion

Top Mortgage Lenders in Tucson

Ranking	Company Name	2021 Loan Volume
1.	Nova Financial	$1.8 billion
2.	Rocket Mortgage	$995 million
3.	Wells Fargo	$851 million
4.	Chase	$727 million
5.	Altitude Financial	$651 million
6.	VIP Mortgage	$648 million
7.	Fairway Independent	$646 million
8.	Pennymac	$560 million
9.	U.S. Bank	$530 million
10.	loanDepot	$529 million

It’ll be interesting to see what this list looks like for 2022.

Do You Need to Use One of Arizona’s Biggest Mortgage Lenders?

Remember, biggest isn’t always best, though it’s possible for big and best to coexist.

Ultimately, it’ll come down to your preferences and personal experience depending on your home loan needs.

The top mortgage lender in Arizona is UWM, which as noted, is a wholesale lender. This means smaller brokerages resell their products.

So it’s possible to work with a small mom-and-pop shop and still get your mortgage from the #1 lender in the state.

But it doesn’t really matter how big, small, or medium your lender is as long as they get the job done and provide a competitive rate (and fees).

Just take the time to explore the many options available and gather more than just one quote if you want the chance to save some dough.

(photo: Andy Atzert)

Source: thetruthaboutmortgage.com

Apache is functioning normally

June 1, 2023 by Brett Tams

The wholesale mortgage lender has also expanded its Conventional 1% Down product, allowing borrowers with less than 80% of the area median income (AMI) to qualify. Eligible borrowers will put down 1% of the loan towards their down payment, and UWM will then pay a 2% grant up to $4,000 for a total down payment … [Read more…]

Apache is functioning normally

June 1, 2023 by Brett Tams

Let’s cut right to the chase. Yes, Chase was the top mortgage lender in Illinois last year, per HMDA data.

The NYC-based bank funded a strong $14.6 billion in the Land of Lincoln, beating out other national brands and hometown lenders.

They grabbed a near-10% market share despite being only the fourth largest mortgage lender nationwide.

And were able to hold off Guaranteed Rate, Wells Fargo, and even Rocket Mortgage in the process.

Read on to learn more about the biggest mortgage lenders in the state of Illinois.

Top Illinois Mortgage Lenders (Overall)

Ranking	Company Name	2021 Loan Volume
1.	Chase	$14.6 billion
2.	Guaranteed Rate	$10.6 billion
3.	Wells Fargo	$6.6 billion
4.	Rocket Mortgage	$6.0 billion
5.	U.S. Bank	$5.6 billion
6.	Huntington Bank	$4.3 billion
7.	loanDepot	$3.8 billion
8.	UWM	$3.5 billion
9.	Newrez	$2.9 billion
10.	Homepoint	$2.8 billion

As mentioned, Chase led the pack with nearly $15 billion in home loan origination volume in 2021, per Richey May’s HMDA data.

That was plenty enough to overtake Guaranteed Rate, which is a direct lender headquartered in Chicago, Illinois.

Despite being a local brand, Guaranteed Rate only mustered $10.6 billion last year.

Coming in a distant third was San Francisco-based bank Wells Fargo with $6.6 billion. Through their controversies, they continue to be a mortgage lender of choice for many.

In fourth was Rocket Mortgage with $6 billion, somewhat lackluster given their headquarters in nearby Detroit, Michigan.

Rounding out the top five was U.S. Bank with $5.6 billion. They seem to perform well in and around their home state of Minnesota.

Others in the top ten included Huntington Bank, loanDepot, United Wholesale Mortgage (UWM), Newrez, and Homepoint.

Top Illinois Mortgage Lenders (for Home Buyers)

Ranking	Company Name	2021 Loan Volume
1.	Chase	$5.6 billion
2.	Guaranteed Rate	$5.5 billion
3.	U.S. Bank	$3.0 billion
4.	Wells Fargo	$2.1 billion
5.	loanDepot	$1.6 billion
6.	UWM	$1.6 billion
7.	Huntington Bank	$1.5 billion
8.	CrossCountry Mortgage	$1.5 billion
9.	Caliber Home Loans	$1.4 billion
10.	Rocket Mortgage	$1.4 billion

If we look at just home purchase loans, Chase was once again #1 with $5.6 billion funded, a top pick for home buyers in the state.

However, Guaranteed Rate was breathing down their neck with $5.5 billion in purchase loans.

It then dropped off quite a bit with U.S. Bank’s $3 billion, Wells Fargo’s $2.1 billion, and loanDepot’s $1.6 billion.

Other brands in the top-10 list were UWM, Huntington Bank, CrossCountry Mortgage, Caliber
Home Loans, and Rocket Mortgage.

Top Refinance Mortgage Lenders in Illinois (for Existing Homeowners)

Ranking	Company Name	2021 Loan Volume
1.	Chase	$8.9 billion
2.	Guaranteed Rate	$5.1 billion
3.	Rocket Mortgage	$4.5 billion
4.	Wells Fargo	$4.4 billion
5.	Huntington Bank	$2.7 billion
6.	U.S. Bank	$2.4 billion
7.	loanDepot	$2.2 billion
8.	Mr. Cooper	$1.9 billion
9.	Freedom Mortgage	$1.9 billion
10.	UWM	$1.9 billion

If you’re an existing homeowner, you might be wondering who helped the most borrowers refinance their home loans.

Those who guessed Chase were correct. It’s pretty rare to see one company sweep all three categories. So it appears Illinoisans really love Chase, at least when it comes to mortgage banking.

Their $8.9 billion was more than enough to run away with this category, despite Guaranteed Rate’s best efforts with $5.1 billion.

In third was Rocket Mortgage with a close $4.5 billion, while Wells Fargo also put up a respectable $4.4 billion in fourth.

Ohio-based Huntington Bank closed out the top five with a much smaller $2.7 billion.

The rest of the top ten included U.S. Bank, loanDepot, Mr. Cooper, Freedom Mortgage, and UWM.

Those relying primarily on this category will need to pivot in 2022 to capture more of the waning mortgage market.

Top Mortgage Lenders in Chicago

Ranking	Company Name	2021 Loan Volume
1.	Chase	$12.2 billion
2.	Guaranteed Rate	$8.8 billion
3.	Wells Fargo	$4.9 billion
4.	Rocket Mortgage	$3.9 billion
5.	U.S. Bank	$3.9 billion
6.	Huntington Bank	$3.6 billion
7.	loanDepot	$3.0 billion
8.	UWM	$2.6 billion
9.	CrossCountry Mortgage	$2.2 billion
10.	Homepoint	$2.1 billion

Who Is the Best Mortgage Lender in Illinois?

While we discussed the top mortgage lenders in the state in terms of loan volume, the best one may or may not be on the lists above.

And what’s best for one home buyer or existing homeowner might not be the right fit for another individual.

Take the time to compare the many mortgage companies available to you. Consider their mortgage rates, their fees, loan program options, and any perks they offer.

Also factor in your personality – do you prefer a lot of hands-on attention from a smaller company, or is technology and self-service your thing?

Once you investigate these things you’ll be able to find a mortgage lender that is best suited for you and your specific needs.

That could mean service over lowest price, or vice versa. If you put in the time, you should be able to get the best of both worlds.

Source: thetruthaboutmortgage.com

Apache is functioning normally

June 1, 2023 by Brett Tams

Now let’s take a look at the top mortgage lenders in New York, based on overall loan volume produced last year.

The state of New York is unique in that many of the top lenders are depository banks that actually hold the loans on their books.

Or at least offer checking and savings accounts to customers alongside mortgage offerings.

This counters the recent rise of nonbanks dominating the mortgage space, which has worried some market watchers.

Anyway, topping the list in 2021 (most recent year available) was JPMorgan Chase, which happens to be headquartered in New York City.

Top Mortgage Lenders in New York (Overall)

Ranking	Company Name	2021 Loan Volume
1.	Chase	$20.9 billion
2.	Wells Fargo	$19.1 billion
3.	Rocket Mortgage	$11.2 billion
4.	Citibank	$9.1 billion
5.	Bank of America	$7.5 billion
6.	Citizens Bank	$7.0 billion
7.	loanDepot	$6.1 billion
8.	UWM	$5.8 billion
9.	First Republic Bank	$4.8 billion
10.	TD Bank	$4.1 billion

Overall, the state of New York accounted for about 4% of the nation’s home loan volume in 2021, per HMDA data presented by Richey May.

And it’s not often the top mortgage lender in a particular state is also a native of the state, but this happens to be true in the case of New York.

Chase grabbed the top spot with $20.9 billion in home loan origination volume during the year, about 10% of their national total.

It was enough to beat out Wells Fargo, which despite all its dramas managed $19.1 billion in residential mortgage volume.

Rocket Mortgage, the nation’s overall top mortgage lender, took third place with $11.2 billion, nearly half of Chase’s volume.

Fourth place also belonged to New York-based company, Citibank, which doled out $9.1 billion in home loans last year.

Bank of America took fifth with $7.5 billion in origination volume, solidifying the depositories’ dominance in the mortgage space in NY.

Citizens Bank, loanDepot, United Wholesale Mortgage, First Republic Bank, and TD Bank rounded out the top 10.

That means seven of the 10 largest mortgage lenders in New York are banks as opposed to nonbanks.

It’s probably the only state in the nation where that’s the case.

Top New York Mortgage Lenders (for Home Buyers)

Ranking	Company Name	2021 Loan Volume
1.	Chase	$9.0 billion
2.	Wells Fargo	$8.8 billion
3.	Citibank	$5.0 billion
4.	Citizens Bank	$4.3 billion
5.	Bank of America	$3.3 billion
6.	UWM	$2.9 billion
7.	loanDepot	$2.8 billion
8.	First Republic Bank	$2.6 billion
9.	TD Bank	$2.0 billion
10.	Rocket Mortgage	$1.8 billion

Now let’s only consider home purchase loans to see how the list shakes out.

Unsurprisingly, banks held the top five spots when it came to serving home buyers in the Empire State.

Once again, Chase held the #1 spot with $9 billion funded, followed by Wells Fargo with a very close $8.8 billion, and Citi with a much lower $5 billion.

Citizens Bank and Bank of America completed the top five with $4.3 billion and $3.3 billion, respectively.

The bottom half of the top 10 included wholesale lender UWM, direct lender Rocket Mortgage, nonbank loanDepot, and two more banks, First Republic and TD Bank.

In other words, most New Yorkers turned to a big bank to get their home purchase loan, as opposed to a mortgage-only institution.

This is somewhat old school, but not a surprise given the state’s big banking presence.

Top Mortgage Lenders in New York (for Refinances)

Ranking	Company Name	2021 Loan Volume
1.	Chase	$11.4 billion
2.	Wells Fargo	$9.8 billion
3.	Rocket Mortgage	$9.2 billion
4.	Bank of America	$3.9 billion
5.	Citibank	$3.4 billion
6.	loanDepot	$3.2 billion
7.	New York Community Bank	$3.0 billion
8.	UWM	$2.8 billion
9.	Citizens Bank	$2.5 billion
10.	Mr. Cooper	$2.3 billion

What about mortgage refinances? Generally, direct lenders win in this category since price is often the biggest factor, not relationship.

Well, once again it was New York’s own Chase that led the way with $11.4 billion in refinance loans.

And Wells Fargo once again came in second, with a fairly close $9.8 billion funded during the year.

National #1 mortgage lender Rocket Mortgage claimed third with $9.2 billion, followed by BofA with a much lesser $3.9 billion and Citi with $3.4 billion.

As you can see, things really dropped off after the top three, with the others in the top 10 funding a whole lot less.

Others in the top 10 included loanDepot, New York Community Bank, UWM, Citizens Bank, and Mr. Cooper (formerly Nationstar).

No big surprises here other than the fact that the top dogs took home much of the business as they did in other categories. Typically there’s a bit more diversity.

Top Mortgage Lenders in New York City (NYC)

Ranking	Company Name	2021 Loan Volume
1.	Chase	$18.4 billion
2.	Wells Fargo	$16.6 billion
3.	Rocket Mortgage	$9.4 billion
4.	loanDepot	$7.8 billion
5.	Citibank	$7.2 billion
6.	Bank of America	$6.7 billion
7.	UWM	$5.6 billion
8.	Citizens Bank	$4.7 billion
9.	Newrez	$4.3 billion
10.	TD Bank	$4.0 billion

Top Mortgage Lenders in Albany

Ranking	Company Name	2021 Loan Volume
1.	SEFCU	$774 million
2.	Homestead Funding	$767 million
3.	CCFCU Funding	$515 million
4.	Trustco Bank	$498 million
5.	Rocket Mortgage	$497 million
6.	Wells Fargo	$356 million
7.	KeyBank	$275 million
8.	Sunmark	$269 million
9.	Citizens Bank	$240 million
10.	Capital Communications CU	$229 million

Top Mortgage Lenders in Buffalo

Ranking	Company Name	2021 Loan Volume
1.	M&T Bank	$822 million
2.	Rocket Mortgage	$707 million
3.	KeyBank	$688 million
4.	Premium Mortgage Corp.	$459 million
5.	Citizens Bank	$408 million
6.	Wells Fargo	$355 million
7.	Northwest Bank	$336 million
8.	UWM	$262 million
9.	Hunt Mortgage Corp.	$254 million
10.	1st Priority Mortgage	$224 million

Top Mortgage Lenders in Rochester

Ranking	Company Name	2021 Loan Volume
1.	ESL FCU	$879 million
2.	Premium Mortgage Corp.	$648 million
3.	Wells Fargo	$504 million
4.	Home Town Funding	$473 million
5.	Rocket Mortgage	$415 million
6.	CNB Mortgage	$412 million
7.	Genesee Regional Bank	$341 million
8.	Citizens Bank	$281 million
9.	M&T Bank	$224 million
10.	The Lyons National Bank	$209 million

Are the Biggest Lenders Also New York’s Best Mortgage Lenders?

The words “top” and “best” can be used interchangeably, but not always.

In other words, one of the largest lenders on the list can also be the best. But they could also be simply mediocre, or worse.

As I always say, you don’t need to use the biggest bank or mortgage lender out there to get your home loan.

You might find a better fit in a local credit union, mortgage broker, regional bank, or community bank.

Of course, you could find that one of the bigger players is your preferred lender. And that’s fine.

Just put in the time to get a few quotes from different mortgage companies to ensure you’ve at least made some effort to comparison shop.

Studies prove that those who shop for their mortgage can save real money. So no matter who tells you such and such is the best, put in your own research too.

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 31, 2023 by Brett Tams

Today we’ll take a look at the top mortgage lenders in Colorado.

Interestingly, the top lender in the state isn’t a direct lender or a depository bank.

In fact, aspiring home buyers and existing homeowners can’t even work with this company directly.

Instead, they’ll need to work with an intermediary to access the loan programs offered by this behemoth of a mortgage company.

This company was also the top mortgage lender in the state of Arizona, giving them a strong foothold in the Mountain West region of the United States.

Top Mortgage Lenders in Colorado (Overall)

Ranking	Company Name	2021 Loan Volume
1.	UWM	$11.7 billion
2.	Rocket Mortgage	$9.5 billion
3.	Chase	$8.5 billion
4.	Wells Fargo	$4.6 billion
5.	U.S. Bank	$4.6 billion
6.	Homepoint	$4.5 billion
7.	Fairway Independent	$4.2 billion
8.	American Financing	$4.1 billion
9.	Pennymac	$4.0 billion
10.	loanDepot	$3.9 billion

As alluded to, the top Colorado mortgage lender last year was actually a wholesale lender that works with mortgage brokers.

This runs counter to the more traditional retail lending channel offered by big banks and household lenders like Rocket Mortgage.

Yet somehow United Wholesale Mortgage (UWM) managed to beat the competition quite easily with $11.7 billion in loan origination volume, per HMDA data from Richey May.

That was more than enough to take out national #1 overall Rocket Mortgage’s $9.5 billion, and JPMorgan Chase’s $8.5 billion.

In order to work with UWM, you’d need to enlist a mortgage broker that is approved to do business with UWM.

Seeing that UWM is the largest wholesale mortgage lender in the nation, most mortgage brokers are.

Another advantage to using a mortgage broker is that they will likely be approved with several companies, so it may turn out that they have a better option beyond UWM.

For the record, Rocket Mortgage also operates a wholesale unit so a broker could be working with both simultaneously and send your loan to the one offering the best price.

Moving on, a pair of depository banks took fourth and fifth, Wells Fargo and U.S. Bank, both with roughly $4.6 billion each.

The rest of the top 10 featured a slew of nonbank lenders, including Homepoint, Fairway Independent Mortgage, American Financing Corp., Pennymac, and loanDepot.

American Financing Corp. is the only Colorado-based mortgage lender on the list, headquartered in Aurora, just east of Denver.

Top Mortgage Lenders in Colorado (for Home Buyers)

Ranking	Company Name	2021 Loan Volume
1.	UWM	$4.7 billion
2.	Chase	$3.9 billion
3.	Fairway Independent	$2.7 billion
4.	FirstBank	$2.1 billion
5.	U.S. Bank	$2.1 billion
6.	Cherry Creek Mortgage	$1.9 billion
7.	Rocket Mortgage	$1.7 billion
8.	Wells Fargo	$1.6 billion
9.	loanDepot	$1.5 billion
10.	Guaranteed Rate	$1.4 billion

If you’re thinking about buying a home, you might be curious who the top lenders are for home purchase loans.

Some mortgage lenders specialize in both purchase loans and refinances, while others focus on just one.

When we narrow it down to just purchase transactions, UWM still retained the lead with $4.7 billion funded.

That was enough to keep Chase’s $3.9 billion at bay, and more than enough to conquer Fairway Independent Mortgage’s $2.7 billion.

Coming in fourth was Colorado’s own FirstBank with $2.1 billion, which has over 100 locations in The Centennial State.

U.S. Bank snagged fifth with roughly the same amount funded during the year.

Local mortgage banker Cherry Creek Mortgage took sixth with $1.9 billion, followed by Rocket Mortgage, Wells Fargo, loanDepot, and Guaranteed Rate.

Always good to see some local names on these lists – and it makes more sense to be in this category as home buyers tend to gravitate to more native companies for big life decisions.

Top Refinance Lenders in Colorado (for Existing Homeowners)

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$7.7 billion
2.	UWM	$7.0 billion
3.	Chase	$4.5 billion
4.	American Financing	$3.7 billion
5.	Freedom Mortgage	$3.3 billion
6.	Homepoint	$3.3 billion
7.	Wells Fargo	$2.9 billion
8.	Pennymac	$2.7 billion
9.	loanDepot	$2.5 billion
10.	Newrez	$2.4 billion

When it came to mortgage refinancing, Detroit-based Rocket Mortgage ruled the roost with $7.7 billion funded last year in the state.

However, their crosstown rival UWM (also from Michigan) wasn’t far off with $7.0 billion funded.

If Rocket served more home buyers in Colorado, they could have challenged the top spot overall.

Coming in third was Chase with $4.5 billion, followed by local mortgage banker American Financing Corp. with $3.7 billion.

And rounding out the top five was Freedom Mortgage with $3.3 billion. They tend to excel when it comes to refinance loans.

Others in the top 10 refinance list included Homepoint, Wells Fargo, Pennymac, loanDepot, and Newrez.

Top Mortgage Lenders in Denver

Ranking	Company Name	2021 Loan Volume
1.	UWM	$7.2 billion
2.	Rocket Mortgage	$5.4 billion
3.	Chase	$5.2 billion
4.	American Financing	$3.0 billion
5.	Fairway Independent	$2.8 billion
6.	U.S. Bank	$2.8 billion
7.	Homepoint	$2.8 billion
8.	Wells Fargo	$2.4 billion
9.	loanDepot	$2.3 billion
10.	Newrez	$2.0 billion

Top Mortgage Lenders in Colorado Springs

Ranking	Company Name	2021 Loan Volume
1.	Ent Credit Union	$1.8 billion
2.	UWM	$1.4 billion
3.	Freedom Mortgage	$1.3 billion
4.	Pennymac	$1.2 billion
5.	Rocket Mortgage	$1.2 billion
6.	NBH Bank	$615 million
7.	Cherry Creek Mortgage	$557 million
8.	Homepoint	$493 million
9.	loanDepot	$468 million
10.	Chase	$450 million

Top Mortgage Lenders in Fort Collins

Ranking	Company Name	2021 Loan Volume
1.	UWM	$550 million
2.	Cornerstone Home Lending	$543 million
3.	Rocket Mortgage	$510 million
4.	Chase	$344 million
5.	First National Bank of Omaha	$342 million
6.	U.S. Bank	$275 million
7.	Elevations CU	$267 million
8.	First Western Trust Bank	$259 million
9.	Homepoint	$258 million
10.	loanDepot	$249 million

Top Mortgage Lenders in Boulder

Ranking	Company Name	2021 Loan Volume
1.	Elevations CU	$1.2 billion
2.	Chase	$720 million
3.	UWM	$558 million
4.	Rocket Mortgage	$510 million
5.	Cherry Creek Mortgage	$398 million
6.	Wells Fargo	$348 million
7.	FirstBank	$305 million
8.	Homepoint	$259 million
9.	Guaranteed Rate	$247 million
10.	loanDepot	$216 million

Are Colorado’s Top Mortgage Lenders Also the Best Choice for Homeowners?

While size can matter when it comes to choosing a mortgage lender, it isn’t always a major consideration.

As noted, the top mortgage lender in Colorado isn’t even a retail company. They operate solely via the business-to-business, wholesale lending channel.

This means working with a smaller mortgage brokerage if you get a loan from UWM, which could be a single individual running their own shop.

Additionally, only one Colorado-based lender made the top-10 list, American Financing Corp.

So if you want a local lender, they might not even feature in these lists. And that’s totally fine, as long as they’re financially sound and above board.

Sure, you might find that the largest lender is also the one you like best, but they don’t necessarily need to be big to get the job done.

As always, take your time, do your research, obtain multiple quotes, and ask lots of questions before you proceed.

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 31, 2023 by Brett Tams

Welp, it’ll be nice to close out 2020 and look ahead to a brand-new year that hopefully features a lot less drama and much more good news.

While the housing market actually absorbed both the COVID-19 pandemic and the presidential election surprisingly well, we can probably thank the record low mortgage rates for that. And the continued lack of inventory.

That has been the silver lining for existing homeowners, but it’s created an even wider divide between the haves and the have-nots, otherwise known as homeowners and renters.

So what does 2021 look like when it comes to mortgages and the housing market? Let’s dust off the old crystal ball and make some predictions.

1. Mortgage rates will hit new record lows

As of this writing, mortgage rates hit 14 new all-time lows in 2020. And there’s a decent chance they’ll hit a 15th before the year is complete.

This has many pundits calling for an end to the low rates. Sound familiar? It does because every single year they call for higher rates, only to be proven wrong over and over.

I expect mortgage rates to hit new all-time lows in 2021, though the caveat is that they may not remain there.

In other words, we could see 30-year fixed mortgage rates reach levels never seen before in the first half of the year, before they rise back above lows seen this year.

The good news is rates should remain low throughout the year if the 2021 mortgage rate predictions hold true.

And that means those who haven’t yet taken advantage of a rate and term refinance can do so and save some dough.

2. Lenders will stay really busy, but won’t break 2020 records

Thanks in part to those ultra-low mortgage rates, banks and lenders will continue to be absolutely slammed.

This is wonderful news for loan originators and mortgage brokers, but not so great for consumers.

Simply put, things will still be slow, so be patient. It may take months to close your mortgage as opposed to 3-4 weeks.

This is just the way things are going right now and you should set realistic expectations if you’re currently shopping for a new home loan.

In terms of loan volume, 2020 mortgage originations will likely surpass the massive totals seen back in 2003.

The question is where does the mortgage industry go from here? While rate and term refis will inevitably become less prevalent in 2021, record home purchase volume of more than $1.5 trillion is expected.

That should keep the party going for mortgage lenders focused on home purchase financing, but it could prove challenging to those that are refinance-heavy.

3. The cash out refinance will re-emerge as a popular product

That being said, while rate and term refis will fade into 2021, the emergence of the cash out refinance could pick up the slack.

Ultimately, borrowers are sitting on a ton of home equity at the moment, the most in history I believe.

At some point, it’s going to be tapped via cash out refinance loans, even if borrowers are forced to take a slightly higher interest rate in the process.

The other big question related to this is will lenders loosen underwriting standards to make up for any decline in new business?

That’s where things went so badly wrong a decade ago, especially as home prices were peaking.

But maybe the Qualified Mortgage (and still decent affordability) will be the difference maker this time around.

4. Mortgage brokers will grab more market share

Now let’s talk about mortgage brokers. Largely forgotten post-housing crisis a decade ago, they’ve been making major strides lately.

In fact, the second largest mortgage lender in the nation, after Quicken Loans, is United Wholesale Mortgage (UWM).

And Quicken also runs a massive wholesale lending division as well, so there’s a good chance you’ll be working with a mortgage broker in 2021 and beyond.

Brokers had a near-35% market share back in 2008 before it fell to around 7% in 2011. Today, it’s closer to 16% and likely to grow back to 20%+ sooner rather than later.

One thing helping brokers today is the abundance of technology that has leveled the playing field.

Even a one-woman shop can offer a better customer experience than a billion-dollar bank thanks to the many tools now readily available.

That, along with access to wholesale mortgage rates from dozens of lending partners, could give brokers the edge going forward.

5. COVID-19 related foreclosures will free up some inventory

Everyone and their grandmother knows that housing inventory is abysmal. There’s just nothing out there no matter where it is you’re trying to buy a home.

Once something does come on the market, it’s being scooped up in record time by desperate home buyers.

The National Association of Realtors recently noted that properties typically remained on the market for just about 20 days in October, down from closer to 40 a year ago.

My expectation is that 2021 will be no different – it’s going to be a seller’s market yet again, which means you really need to do your homework and be prepared to make an offer immediately.

The only possible relief could come from COVID-19 related foreclosures, assuming those actually transpire once forbearance options fizzle out.

NAR also said distressed sales (foreclosures and short sales) represented less than 1% of home sales in October, which was down from 2% in October 2019.

Take the time to research how mortgages work and get pre-approved so you’re ready to make your move at a moment’s notice. But also still do your due diligence and don’t buy a home sight-unseen.

6. Home prices will continue to surge higher

That critical lack of inventory, coupled with the still-low mortgage interest rates will lead to even higher home prices in 2021.

It’s pretty simple really, just a matter of supply and demand.

Speaking of, unsold inventory remains at an all-time low of 2.5-months at the current sales pace, which is well below the near-4-month figure seen a year ago, per NAR.

As such, the Realtor group expects existing home prices to rise a further 5.7% in 2021, and that might be conservative given the red-hot housing market combined with an ongoing pandemic.

Again, excellent news for those who already homes, but another unwelcome development for the many prospective first-time home buyers out there.

7. iBuyers will regain market share and usurp real estate agents

Despite a housing market that will remain on fire in 2021, I expect iBuyers to continue to gain market share.

They got derailed last spring thanks to the emergence of COVID-19, and actually stopped purchasing homes in many markets.

But now they’re not only returning to market, but also expanding to new metros nationwide.

Folks love convenience, even if there’s a cost. And when it comes to iBuying, the cost is likely a lower sales price, meaning you walk away with less.

However, home sellers may be skittish about letting others into their homes, so going with a sure thing from an iBuyer could be just the ticket.

It also allows home sellers to pivot to a replacement property without dealing with contingencies, which are basically a no-go right now with competition so fierce.

8. Remote closings and distanced real estate transactions will be the norm

To that same end, I expect the temporary measures to keep real estate distanced will become more of a mainstay in 2021.

So those remote closings, appraisal waivers and other flexible appraisal options, along with new methods to document income and verify employment before loan closing should continue.

Additionally, we should see more technology that supports these efforts, which is a nice silver lining of the pandemic.

All the promises about making the mortgage process easier may come to fruition a lot sooner because no one wants to be near each other.

However, as noted, it’ll still take a while to get a home loan because lender capacity will remain an issue well into 2021.

9. Home remodeling will remain white-hot as homeowners stay put and spend more time at home

One trend that we saw this year will also extend into 2021, and could in fact become even more popular. I’m talking about home remodeling.

Have you tried to book a contractor lately? Good luck! They’re all busier than ever because homeowners are spending more and more time in their properties.

That has made many of us question if we should upgrade our digs, or get to those projects we’ve been putting off for years.

Most existing homeowners don’t seem to be going anywhere, as evidenced by that lack of inventory and those low mortgage rates, so they’re fixing up what they’ve got.

While you might be considering a home equity line of credit to pay for your home improvements, a cash out refinance that features a fixed interest rate could be the better option.

10. The exodus out of urban centers to the suburbs will stay on trend

Lastly, I expect the urban exodus to continue in 2021, even if the vaccine proves successful and we get our heads back above water.

The damage of 2020 on our psyches is already done, which means some just won’t consider the urban lifestyle anytime soon, or ever again.

Once forgotten, the suburbs are back with a vengeance thanks to COVID-19, and the pandemic perhaps served as a not-so-gentle reminder that more space and fresh air isn’t such a bad thing.

Sure, urban living has its advantages, but its fragility has also been exposed big time.

And with remote work and less commuting no longer just a trend, it makes a lot more sense to be anywhere, even far from a city center.

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 31, 2023 by Brett Tams

Despite being a big banking hub, the top mortgage lenders in North Carolina are mostly nonbanks.

In fact, just three of the top 10 are depository banks, with one credit union and the rest nonbank direct lenders.

However, several of the top lenders in the state also happen to be headquartered in North Carolina.

Those names include Bank of America, Truist Financial, and State Employees’ Credit Union.

Read on to see who topped the list in 2021 for mortgage lending overall.

Top Mortgage Lenders in North Carolina (Overall)

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$11.5 billion
2.	Wells Fargo	$8.1 billion
3.	State Employees CU	$7.3 billion
4.	Truist	$6.3 billion
5.	Movement Mortgage	$5.3 billion
6.	Pennymac	$4.7 billion
7.	Freedom Mortgage	$4.0 billion
8.	UWM	$3.5 billion
9.	loanDepot	$3.1 billion
10.	Bank of America	$2.8 billion

Yep, you probably guessed right. Rocket Mortgage was the top mortgage lender in North Carolina last year with $11.5 billion funded, per HMDA data from Richey May.

In second was San Francisco-based bank Wells Fargo with $8.1 billion, followed by Raleigh based-State Employees’ Credit Union with $7.3 billion.

Next up was Charlotte-based Truist Financial with $6.3 billion, formerly two companies (BB&T and SunTrust Bank).

Completing the top five was Movement Mortgage with $5.3 billion, a South Carolina-based direct lender.

The rest of the best included Pennymac, Freedom Mortgage, United Wholesale Mortgage (UWM), loanDepot, and Bank of America.

UWM is a wholesale lender that works exclusively with mortgage brokers, meaning you can’t work with them directly.

Top Mortgage Lenders in North Carolina (for Home Buyers)

Ranking	Company Name	2021 Loan Volume
1.	Movement Mortgage	$3.7 billion
2.	Wells Fargo	$3.2 billion
3.	Truist	$2.9 billion
4.	State Employees CU	$2.9 billion
5.	Rocket Mortgage	$2.5 billion
6.	Pennymac	$2.3 billion
7.	Atlantic Bay Mortgage	$1.9 billion
8.	Fairway Independent	$1.7 billion
9.	Chase	$1.4 billion
10.	Guaranteed Rate	$1.4 billion

If we focus solely on home purchase lending, Fort Mill-based Movement Mortgage was the top dog with $3.7 billion funded.

It was more than enough to beat out Wells Fargo’s $3.2 billion, often the purchase loan king.

In third and fourth were NC’s own Truist and State Employees’ Credit Union, both with about $2.9 billion funded.

In a more distant fifth place was Rocket Mortgage with $2.5 billion in loan origination volume.

The other players in the top 10 included Pennymac, Atlantic Bay Mortgage, Fairway Independent Mortgage, Chase, and Guaranteed Rate.

Top Refinance Lenders in North Carolina (Existing Homeowners)

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$8.9 billion
2.	Wells Fargo	$4.7 billion
3.	State Employees CU	$4.1 billion
4.	Freedom Mortgage	$3.3 billion
5.	Truist	$3.0 billion
6.	Pennymac	$2.4 billion
7.	loanDepot	$2.3 billion
8.	UWM	$2.2 billion
9.	Better Mortgage	$1.9 billion
10.	Mr. Cooper	$1.8 billion

Now a look at the mortgage refinance leaders in the state of North Carolina.

Unsurprisingly, national #1 mortgage lender Rocket took the top spot with $8.9 billion funded.

That was nearly double second place Wells Fargo, which managed just $4.7 billion in refinance loan volume.

Once again, State Employees’ Credit Union had a strong showing, taking third place with $4.1 billion.

Florida-based refinance specialist Freedom Mortgage took fourth with $3.3 billion, while Truist grabbed fifth with $3.0 billion funded.

Others in the top 10 included Pennymac, loanDepot, UWM, under-fire Better Mortgage, and Mr. Cooper.

It was mostly household names on this list, as it usually is. State Employees’ Credit Union did a good job of keeping it local, despite refinances being mainly price driven.

Those who rely too much on refis might have trouble in coming years as the market leans heavily on purchase transactions.

Top Mortgage Lenders in Charlotte

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$4.3 billion
2.	Wells Fargo	$3.0 billion
3.	Movement Mortgage	$2.6 billion
4.	Truist	$1.8 billion
5.	Bank of America	$1.7 billion
6.	UWM	$1.5 billion
7.	loanDepot	$1.3 billion
8.	Pennymac	$1.2 billion
9.	Freedom Mortgage	$1.1 billion
10.	American Security Mtg	$1.1 billion

Top Mortgage Lenders in Raleigh

Ranking	Company Name	2021 Loan Volume
1.	Rocket Mortgage	$2.4 billion
2.	Wells Fargo	$1.8 billion
3.	State Employees CU	$1.4 billion
4.	Truist	$1.4 billion
5.	UWM	$972 million
6.	Pennymac	$885 million
7.	loanDepot	$841 million
8.	Movement Mortgage	$779 million
9.	Better Mortgage	$752 million
10.	Freedom Mortgage	$690 million

You May Have Never Heard of the Best North Carolina Mortgage Lenders

Size isn’t everything. It can be advantageous to be large to get things done in the mortgage industry, but it may also prove to be a nuisance if you’re too big.

Sometimes, a nimbler lending partner, such as a mortgage broker or credit union, could get you to the finish line faster, with fewer headaches along the way.

I understand that when it comes to financial decisions, using a big, household name can feel like the safe move, but consider all your options.

Obviously take the time to vet any company or individual first, but know there are many different ways to get a mortgage.

Whether it’s an individual broker, local bank, online lender, credit union, or major financial institution.

Chances are there are some really highly-rated mortgage companies out there that probably don’t advertise or get much press.

And that’s just fine, as long as they’ve got good reviews, offer competitive pricing, and provide quality service.

(photo: Mark Clifton)

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 30, 2023 by Brett Tams

Today we’re going to talk about a “temporary buydown,” the latest effort by the mortgage industry to provide much-needed payment relief to borrowers.

In recent months, mortgage rates effectively doubled, straining affordability and cooling the hot housing market.

These higher rates have also had a big impact on the mortgage industry, which is typically reliant on low rates to fuel its important mortgage refinance business.

Mortgage lenders understand the impact these higher rates have had on borrowers and prospective home buyers, so there’s a good chance you’ll see more of these offers pop up soon.

Let’s discuss how these buydown mortgages work, if they can save you money, and the general pros and cons.

What Is a Temporary Buydown Mortgage?

In short, a temporary buydown is a home loan that features a reduced interest rate for a temporary period of time, whether it’s one, two, or three years.

The interest rate may be 2% lower in year one, 1% lower in year two, and then the standard note rate thereafter.

An upfront cost covers these lower monthly payments, with the required funds set aside in a buydown account.

Each month during the temporary buydown period, the borrower makes a reduced monthly payment, with the additional amount released from the buydown account to cover the difference.

This makes monthly payments more affordable during the beginning of the loan term.

Typically, borrowers opt for these buydowns because they expect their income to increase in the near future. Or the buydown is offered by a home builder or home seller to sweeten the deal.

To that end, these buydowns are often paid by a home seller or builder, or perhaps a mortgage lender.

It may also be possible to apply seller concessions toward a temporary mortgage buydown.

Recently, United Wholesale Mortgage (UWM) and CrossCountry Mortgage have introduced temporary buydown programs to offset high mortgage rates.

Types of Temporary Buydown Mortgages

$400,000 loan amount with 2-1 buydown	Interest Rate	Monthly Payment	Monthly Savings	Annual Savings
Year 1	3.5%	$1,796.18	$474.98	$5,699.76
Year 2	4.5%	$2,026.74	$244.42	$2,933.04
Year 3-30	5.5%	$2,271.16	$0	$0

2-1 Buydown

There are several buydown loan options out there, with the “2-1 buydown” perhaps the most common.

As the name suggests, it lowers your interest rate by a full 2% the first year, and 1% the second year.

For example, if you qualified for a rate of 5.5% on a 30-year fixed, your interest rate in year one would be 3.5%.

In year two, your interest rate would rise to 4.5%. And in year three (and beyond) you’d pay the full note rate of 5.5%.

As seen above, a homeowner would have a payment of $2,271.16 per month on a 5.5% mortgage with a $400,000 loan amount.

During year one, they’d save $474.98 per month and $5,699.76 annually.

During year two, they’d save $244.42 per month and $2,933.04 annually.

That’s about $8,600 total, which would need to be earmarked to cover the buydown cost over those two years.

3-2-1 Buydown

There is also a “3-2-1 buydown,” which is perhaps less common given the enormous expense involved.

This type of buydown lowers the interest rate by 3% the first year, 2% the second year, and 1% the third year.

After that, your mortgage rate returns to the note rate for the remainder of the loan term.

So if the note rate were 5.5%, you’d be looking at 2.5%, 3.5%, and 4.5% in years 1-3.

1-0 Buydown

Going the opposite way, you might come across a “1-0 buydown,” which is simply a 1% reduction the first year.

So if the note rate were 5.5%, you’d get a year at 4.5% before the mortgage reverted back to 5.5% for the remainder of the loan term.

In mid-September 2022, Rocket Mortgage launched its so-called “Inflation Buster,” a 1-0 buydown that provides customers with a reduced interest rate during the first 12 months.

For example, instead of a rate of 5.75%, they might get a rate of 4.75% for the first year, with Rocket covering the difference in monthly payment automatically.

As you can see, the 2/1 buydown loan is most popular, followed by 1/0, and 3/2/1, per data from Black Knight and Optimal Blue.

Temporary Buydown Rules

Note that temporary buydown periods typically can’t exceed three years. So the options above will likely be the only terms available.

Additionally, the annual increase in mortgage rate is generally capped at 1%, probably to avoid payment shock.

As noted, borrowers still need to qualify at the full note rate in most instances, unless a borrower is expected to see a large increase in future income (for certain loan types).

Buydowns are also only permitted on certain property types, such as primary residences and second homes, with investment properties often prohibited.

But can be used in conjunction with an FHA loan, VA loan, or conforming mortgage backed by Fannie Mae or Freddie Mac.

It may be possible to use a temporary buydown on an adjustable-rate mortgage with the VA or Fannie/Freddie, but not the FHA.

The buydown funds are also not refundable unless the mortgage has been paid off ahead of time, in the case of a refinance or home sale.

If this were to happen, the proceeds would typically go toward paying off the mortgage or be returned to the borrower/lender. Be sure to ask about this!

Mortgage Buydown Pros and Cons

While receiving a reduced mortgage rate the first couple years sounds nice, the upfront cost generally equals the savings.

In other words, you’re not really saving any money, you’re simply allocating funds in a different manner.

Basically, paying upfront instead of monthly, though if someone else is footing the bill, it can be considered a money-saving move.

Also note that mortgage lenders typically still require you to qualify at the actual note rate. So if the post-buydown rate is 5.5%, you need to qualify at that rate, even if you get a 3.5% rate in year one.

In the past, some underwriters may have allowed a lower qualifying rate, but that became a big no-no after the housing crisis in the early 2000s (VA loans might be the exception).

So what’s the point then? Well, as noted, if a third party is covering the cost of the buydown, why not take it?

Or if you have extra funds from a home builder or seller that can’t be used otherwise, or you don’t want to use them toward say the down payment or other closing costs.

But perhaps a better alternative is paying mortgage discount points, which result in a lower interest rate for the entire loan term. This is known as buying down your rate, on a permanent basis.

For example, you might pay one point upfront for an interest rate that is .375% lower for the entire 30-year loan term.

Another option is to go with an adjustable-rate mortgage that offers a fixed-rate period the first five or seven years (5/1 ARM or 7/1 ARM). You actually save money via a lower interest rate.

And in the case of discount points, save money once the breakeven period has passed.

Read more: Temporary vs. Permanent Mortgage Buydowns: Which to Choose and Why

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 30, 2023 by Brett Tams

If you’re curious who the top mortgage lenders in Utah are, I’ve got some answers.

Last year, more than 500 lenders in The Beehive State originated nearly $100 billion in home loans.

But one mortgage company far exceeded the others, so much so that it wasn’t even close.

Interestingly, this company isn’t headquartered in the state of Utah, nor does it operate retail locations.

I’m talking about United Wholesale Mortgage, or UWM for short. Read on to see who else ranked in the top 10.

Top Mortgage Lenders in Utah (Overall)

Ranking	Company Name	2021 Loan Volume
1.	UWM	$9.3 billion
2.	Rocket Mortgage	$4.5 billion
3.	Intercap Lending	$3.6 billion
4.	Mountain America CU	$2.9 billion
5.	First Colony Mortgage	$2.9 billion
6.	Homepoint	$2.7 billion
7.	America First CU	$2.4 billion
8.	Academy Mortgage	$2.2 billion
9.	SecurityNational	$2.1 billion
10.	Wells Fargo	$2.1 billion

Yep, a wholesale mortgage lender topped the rankings in the state of Utah, originating about $9.3 billion there in 2021, per HMDA data from Richey May.

As such, we might say that a legion of mortgage brokers is #1, as wholesale lenders rely on these intermediaries to generate all their business.

What’s surprising is the margin above second place Rocket Mortgage, which funded just $4.5 billion there.

This meant UWM doubled the volume of its nearest competitor, who also happens to be the top lender nationwide.

In third was Draper, Utah-based Intercap Lending, which originated $3.6 billion in its home state.

In fourth was fellow Utah company Mountain America Credit Union, a Sandy-based company that funded $2.9 billion.

Rounding out the top five was Orem-based First Colony Mortgage Corp. with a similar $2.9 billion.

It’s not often that you see three of the top five lenders of a particular state headquartered within the state.

But wait, there’s more! After six placed Homepoint’s $2.7 billion came Ogden-based America First Credit Union with $2.4 billion in seventh.

They were followed by Academy Mortgage (yep, also from Utah), SecurityNational Mortgage (also Utah), and finally Wells Fargo

All told, six of the top 10 mortgage lenders in Utah are Utah-based companies, which could be some kind of a record for an individual state.

Top Utah Mortgage Lenders (for Home Buyers)

Ranking	Company Name	2021 Loan Volume
1.	UWM	$3.1 billion
2.	Intercap Lending	$2.0 billion
3.	First Colony Mortgage	$1.5 billion
4.	SecurityNational	$1.3 billion
5.	Academy Mortgage	$1.1 billion
6.	Chase	$921 million
7.	Homepoint	$859 million
8.	Rocket Mortgage	$791 million
9.	Wells Fargo	$681 million
10.	Guaranteed Rate	$677 million

When we fine-tune the list to only consider home purchase lending, UWM once again tops the list with $3.1 billion funded.

While still mostly blowing away the competition, second place Intercap Lending narrowed the gap with $2 billion funded.

In third was First Colony Mortgage with $1.5 billion, followed by SecurityNational Mortgage with $1.3 billion and Academy Mortgage with $1.1 billion.

Once again, Utah-based lenders dominated the list, taking four of the top five spots.

This tells me Utahns really prefer to keep it local when obtaining a home loan, especially a home purchase loan.

The rest of the top 10 included Chase, Homepoint, Rocket Mortgage, Wells Fargo, and Guaranteed Rate.

A lot of big, national brands in there after taking into account the local companies.

Top Refinance Lenders in Utah (for Existing Homeowners)

Ranking	Company Name	2021 Loan Volume
1.	UWM	$6.1 billion
2.	Rocket Mortgage	$3.6 billion
3.	Mountain America CU	$2.0 billion
4.	Homepoint	$1.9 billion
5.	America First CU	$1.8 billion
6.	Intercap Lending	$1.6 billion
7.	First Colony Mortgage	$1.4 billion
8.	Wells Fargo	$1.3 billion
9.	Freedom Mortgage	$1.3 billion
10.	Pennymac	$1.2 billion

When it came to refinances for existing homeowners, UWM once again took top honors with $6.1 billion funded, a clean sweep of all three categories.

In second was Rocket Mortgage with $3.6 billion, followed by Homepoint with $1.9 billion.

No Utah-based companies in the top three, which isn’t a big surprise as mortgage refinances are typically price-driven.

In fourth was Intercap with $1.6 billion, followed by Mountain America with $1.5 billion.

The rest of the best included First Colony, America First, Wells Fargo, Freedom Mortgage, and Pennymac.

Top Mortgage Lenders in Salt Lake City

Ranking	Company Name	2021 Loan Volume
1.	UWM	$3.9 billion
2.	Rocket Mortgage	$1.8 billion
3.	Intercap Lending	$1.6 billion
4.	Homepoint	$1.2 billion
5.	Mountain America CU	$1.1 billion
6.	SecurityNational	$1.0 billion
7.	America First CU	$800 million
8.	Chase	$730 million
9.	Academy Mortgage	$676 million
10.	Wells Fargo	$665 million

Top Mortgage Lenders in Ogden

Ranking	Company Name	2021 Loan Volume
1.	UWM	$1.6 billion
2.	Rocket Mortgage	$975 million
3.	America First CU	$971 million
4.	Academy Mortgage	$866 million
5.	Intercap Lending	$699 million
6.	Goldenwest CU	$601 million
7.	Homepoint	$542 million
8.	Pennymac	$507 million
9.	Freedom Mortgage	$469 million
10.	Wells Fargo	$442 million

Top Mortgage Lenders in Provo

Ranking	Company Name	2021 Loan Volume
1.	UWM	$2.2 billion
2.	First Colony Mortgage	$1.5 billion
3.	Rocket Mortgage	$925 million
4.	Intercap Lending	$724 million
5.	SecurityNational	$680 million
6.	Homepoint	$678 million
7.	Utah Community CU	$615 million
8.	Mountain America CU	$559 million
9.	Chase	$384 million
10.	Pennymac	$380 million

Who Are the Best Utah Mortgage Lenders?

Seeing that the top mortgage lender in Utah was a wholesale lender, you’d need to get the ratings of all the individual mortgage brokers to determine their overall likability.

That would prove too difficult and wouldn’t really tell us much as the broker is likely more important than the lender they work.

Second placed-Rocket has a good 4.48-star rating on Zillow, while third placed-Intercap has a stellar 4.97-star rating.

Mountain America is generally well-liked (America First not as much), though hard to determine if it’s because of their mortgage lending or other banking services. Both are credit unions.

First Colony also has a 4.97-star rating on Zillow, slightly better than Academy’s 4.96 and Homepoint’s 4.89 rating. Meanwhile, SecurityNational Mortgage has a 4.88-star rating.

Then there’s Wells Fargo, which we all know has had its share of mortgage-related controversies, yet is still a go-to for many.

Other Utah-based mortgage companies not in the top 10 include SLC’s own Primary Residential Mortgage Inc. with a 4.98-rating, and Sandy’s Citywide Home Loans with a 4.96 rating.

In other words, there are plenty of good options out there, both big and small, some of which are household names and others relative unknowns.

Put in the time to research a handful of companies before making a decision on one.

(photo: Pedro Szekely)

Source: thetruthaboutmortgage.com