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Apache is functioning normally

August 14, 2023 by Brett Tams

Online bill pay can be a major convenience: It can allow you to schedule payments to transfer money from your bank account to your creditors. Using this technology can also be a money-saving move. It can lower the odds of your forgetting to pay a bill or winding up with late payment charges.

To be honest, paying bills likely isn’t anyone’s favorite way to spend free time. Automating the process may let you focus your energies elsewhere without needing to worry about how much money is due when and where.

If you’re curious to know the answer to, “How does bill pay work?” and understand how it could simplify your life, read on.

What Is Online Bill Pay?

Bill pay is a way of paying your bills online and automating your finances. It allows you to use your mobile device, laptop, or tablet to send money from your account to that of another person or business. No check writing required.

You specify the funds and provide details on the recipient, and the amount is automatically taken from your account and sent to the payee.

Yes, you can do this in real time, but you can also determine the “when.” That means you can schedule bills for payment in advance whenever you have time free, which can be a huge life hack.

Using Bill Pay to Organize Your Bills

When you set up bill pay, it can be a good opportunity to review your finances and the money you have coming in and going out.

You might also decide to stagger the payment dates on your bills to enhance your cash flow. To help with this, you may be able to change due dates on your bills by contacting your creditor.

Here are some of the ways you might use bill pay:

• Mortgage or rent

• Utilities

• Car loan payments

• Credit card bill

• Gym memberships

• Streaming channel and other subscriptions

• Student loans

• Charity donations

💡 Quick Tip: Make money easy. Open a bank account online so you can manage bills, deposits, transfers — all from one convenient app.

Setting Up Online Bill Pay

While bill pay can help make managing finances simpler, it does require some initial manual set-up. But, once you’ve learned how bill pay works, this automatic feature can make keeping track of and paying bills less cumbersome. Here are some ways to get started:

1. Finding a Financial Partner that Offers Bill Pay

While many financial institutions offer digital payment tools, like bill pay, it’s worth investigating the features that are included at each, before opening up an account. Online billing is free with some accounts, while some providers may charge for each transaction — either per bill or on a repeating monthly basis.

Recommended: When All Your Money Goes to Bills

2. Determining which Bills to Autopay

Utility bills, loan payments, credit card bills — you can pay just about any bill using bill pay. One benefit of centralizing bill payments is that, whether it’s a one-off charge payment or recurring bill, the user can rest assured that the bill will get paid on time — assuming bill pay has been set up correctly and there are sufficient funds in the linked account.

To streamline bill payments even further, it may be helpful to think about which ongoing bills you want to automate on a revolving basis through bill pay. Every month, bill payment could go out automatically, on a schedule determined by you, to the businesses or service providers where the money is due.

Predictable expenses that don’t fluctuate from month to month, such as loan and mortgage payments or the internet bill, are solid candidates for recurring automated payments. After all, it can be easier to budget for an expense that won’t go up and down from month to month. For bills that always cost the same, you may want to schedule payment for a time each month when you know there’ll be sufficient funds in your account to cover what’s come due. Some service providers may even allow you to change the due date on certain bills.

3. Gathering Together All Bills

Once a person has figured out which bills to pay automatically, they still might want to gather together all their regular bills in one place. (Organizing your bills can really help you see exactly where your money goes.) While individual bills are generally due at the same time each month, bills from different businesses or providers will have different due dates.

With all the bills in one place, you can then enter the various billing accounts into your money management provider’s bill pay system. It could be useful to research each bill ahead of time, determining whether they’re delivered by snail mail, paperless emails, or both.

4. Logging on to Personal Finances

As with other personal finances, bill pay is generally managed through a financial institution’s website or mobile app. A person interested in accessing bill pay could simply sign on to their secure account and search for the “Pay a Bill” or “Online Bill Pay” function.

5. Inputting Billing Information

Once logged on, you might follow the prompts to add individual billing accounts, indicating for each the funds you wish to pay with. You’ll likely be asked to input the name of the business or service whose payments you’re seeking to automate. You may also be asked for more specific details, such as your individual account number.

If you can’t find the business or service provider listed, you want to try spelling out the full name, removing abbreviations. If you still can’t find the payee, it’s possible that you can still utilize bill pay, but you may need to manually add in the payment details.

Having printed or saved digital copies of previous bills handy can be helpful here. (One other potential option is to set up automated payments, linked to your money accounts, directly through the provider — for instance, the water department of the city where you live).

When paying electronically, you’ll need to add your account number so that your payment is properly credited to you. You can also add the amount and frequency of payments, selecting a specific payment date (for one-time payments) or a regular schedule (for repeat bills that get paid on the same date every month).

Some financial institutions place a cap on the amount of money that can be transferred electronically through bill pay. If an automatic payment exceeds that designated transaction limit, users may then need to pay via a physical method, such as a personal or cashier’s check.

6. Taking Note of the Billing Schedule

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Keeping Track of Outstanding Bills and Extra Fees

One research report (spanning 2,000 individuals) indicates that 28% of Americans report difficulty in paying their bills on time. In this group, 52% of those earning less than $25,000 or less noted difficulty with paying bills, while only 11% of those earning $125,000 or higher reported the same bill-paying challenges.

benefits to automatic bill pay, including avoiding overdue accounts.

Here are some consequences of not paying bills on time.

Imposing Late Fees

One of the ways companies or service providers enforce on-time payments is by penalizing people for, well, paying late. Whether it’s a credit card, utility bill or simply missing a payment date by a single day, submitting a late payment can result in late fees, higher interest rates, or other charges.

Put another way, not paying right now can cost individuals more in the long run. It’s worth noting that these fees or penalties can be higher if a person has a previous history of late or unpaid bills.

Accruing Interest Charges

On top of late penalties, some providers may also charge interest on the balance owed, essentially creating a double-wallop of fees if you’re late paying a bill. In some cases, the interest may be charged starting the day an account becomes overdue. In others, it may accrue going back to the purchase date or transaction day.

Depending on the interest rate charged and how frequently that interest compounds, this fee could quickly balloon to more than the initial fee assessed.

Experiencing Service Disruptions

In some cases, a provider may have the right to shut off your service if you pay a bill late. Not only are such disruptions a major interruption to daily life (ahem, no water, ahem) individuals may also have to pay a reinstatement fee once account has been paid—just to reactivate the service, such as electricity, natural gas, or the internet.

Declining Credit Rating

Think no one other than the service provider will notice a missed bill payment? Not so, in many cases. Payment history on outstanding debts makes up 35% of a FICO credit score. So, things like, overdue credit card bills, unpaid mortgage or car payments, and other late payments can erode an individual’s credit score.

It’s worth recalling that lenders and landlords can rely in part on credit scores when evaluating the risk of doing business with someone. So, dings to a credit score—things like late payments—can impact the likelihood of being approved for a loan or a lease. (Generally speaking, lenders consider a score below 580 a sign that the borrower is at a higher risk of not paying back the money loaned).

Even if approved, having a lower credit score could increase the rate of interest charged on a loan or credit card, potentially costing the borrower thousands of dollars over time.

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Weighing the Benefits of Bill Pay

Not having enough money is just one reason people pay bills late. In many cases, the complexity of managing competing bills is a factor. It can be difficult to stay on top of each individual due date, especially for one-off bill payments or those bills that get paid less frequently, such as quarterly and annual bills. If you pay different bills from separate accounts, paying bills can become even more tangled.

Adopting regular strategies for paying bills can help solve remembering when to pay each bill (and with which account).

One payment strategy is to use online bill pay tools to automate your finances. Instead of remembering to pay each individual bill, while keeping track of competing due dates and amounts, bill pay allows users to set a payment schedule in advance and then, essentially, to forget about it.

Automatic bill payments can be a key way to prevent late payments and to simplify this important aspect of managing one’s finances. Now that you know what bill pay is and how it works, you can decide if it’s a wise move for you.

The Takeaway

Bill paying is a necessity that can be simplified. Signing up for automated bill-pay can put you in control. It can ensure that outstanding bills get paid on time or when you have more money in your accounts, reducing the likelihood of late-payment or overdraft fees.

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FAQ

Does bill pay take the money out right away?

In many cases you can determine when you want the transfer of funds to occur. You can pay in real time or schedule the payment for a later date.

Does bill pay send a physical check?

Bill pay is an electronic process that moves funds from one account to another. You do not have to write a check, nor does the payee receive one.

What is the difference between bill pay and ACH

Bill pay is a way of automating your finances. ACH (Automated Clearing House) is a network that moves funds electronically between banks. Bill pay may use the ACH network.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

August 14, 2023 by Brett Tams

Let’s say that you find yourself with some tax debt this year. It’s less than ideal—if you’re scrambling to pay off your tax debt, it might have a huge impact on your financials. But does tax debt affect your credit score? And does an IRS collection go on your credit report?

The IRS doesn’t report directly to the credit bureaus. And a tax lien won’t show up on your credit report either. But that doesn’t mean taxes won’t impact your credit score. Read on to find out more about how federal taxes and credit can be related.

Does IRS Collection Go on Your Credit Report?

The IRS doesn’t report information about the taxes you owe, when or how you pay them or whether you’re in collections to the credit bureaus. In fact, the Taxpayer Bill of Rights includes a right to privacy and confidentiality. That means that in many situations, your tax information is not public knowledge.

What does this mean?

Your payments on a tax bill, whether on time or otherwise, generally don’t impact your credit positively or negatively.
If you’re late paying your taxes, the IRS won’t report that information to the credit bureaus.
The IRS itself typically won’t report your debt to the credit bureaus at all.

Does IRS Debt Ever Show up on Your Credit Report?

Prior to April 2018, federal tax debt could show up on your credit report via another path. If the IRS files a tax lien against you for taxes owed, the information becomes public record. That’s true of most liens.

Credit reports used to include information about liens. In April 2018, the credit reporting agencies modified policies on how certain public records, including liens, were dealt with. That included removing all tax liens from credit reports.

What does this mean?

Tax liens won’t show up on your credit report, so tax information probably won’t ever show up.
This is due to a policy change from the credit bureaus, though, and that can always be reversed if things change.
Tax liens are still public records, so creditors or others can find out about them if they look.

How Do Taxes Affect Your Credit Score?

Just because taxes don’t appear on your credit report doesn’t mean they won’t have an impact on your credit score. If you’re behind on taxes or dealing with paying off a large tax bill, that could have an impact on your overall finances. In turn, that could negatively impact your credit score. Here are a few ways this can happen:

You Prioritize Tax Debt Over Other Debt

In the worst-case scenario, you might make payments on tax debt instead of payments owed on a mortgage, car loan or other debt. If you do this for several months, you could risk serious issues like foreclosures or repossessions. Even if you only do it for a month or two, you can end up with late payments reported on your credit report. All those things are bad for your score.

In less severe cases, you might be able to make tax payments while also making timely payments on your other debts. But perhaps you’re not paying down balances on those debts quickly because you’re prioritizing your tax debt. That can lead to a higher credit utilization ratio for longer, which can impact your credit score.

You Use Revolving Credit to Pay Taxes

If you aren’t starting with a large balance on your credit card accounts, you might think about using them to pay down your tax bill. That’s one way to remove the stress of a potential tax lien. For many people, the interest expense of paying off some credit card debt is preferable to facing consequences from the IRS.

But this option does impact your credit score. If you max out or drive up your credit card balances to pay off tax debt, you increase your credit utilization ratio. Credit utilization is about 30% responsible for your credit score, so that can make for a big impact!

You Take Out a Loan to Pay Taxes

Instead of revolving credit, you might use an installment loan to pay off some tax debt. Whether you’re taking out an unsecured personal loan or a home equity loan, this new debt will have at least some impact on your credit. First, there’s the hard inquiry that may be required to evaluate you for the loan. Hard inquiries can negatively impact your credit score a bit.

Then there’s the fact that you have a new account on your credit score. That can also cause a temporary drop in your score if it changes the overall age of your credit.

It’s Important to Deal With Taxes Promptly

Tax debt doesn’t magically go away, and the impact to your life and finances can get bigger the longer you ignore the issue. If you owe taxes, make a plan to pay them as soon as you can.

Does filing taxes late affect your credit score? Not directly, but it can lead to all the issues discussed above. If you know you’ll owe taxes, don’t avoid filing because you can’t pay. Interest on tax debt is often less than the fines for not filing your return on time. You can also reach out to the IRS to set up installment plans or other payment arrangements on large tax bills.

It’s also a good idea to be familiar with how your other debts might impact your taxes. For example, if a creditor forgives your debt and sends you a 1099C cancellation of debt, you may need to pay taxes on that amount.

Learning how to do your taxes yourself and getting a head start on the process every year can be a good idea to get ahead of tax debt. When in doubt, consider consulting a tax or financial professional to help you come up with the right plan for you.

Not sure what your credit score is to begin with? Sign up for ExtraCredit® and get the full story about your credit with information from all three major bureaus and 28 of your FICO® scores.

Source: credit.com

Apache is functioning normally

August 14, 2023 by Brett Tams

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode: Get an inside look into strategies and pitfalls of the high-risk, high-reward world of day trading.

Hosts Sean Pyles and Andy Rosen discuss the high-stakes world of day trading and shed some light on your statistical chances of finding success. Then, Andy welcomes seasoned traders Sierra Smith and Michael Sincere to the podcast to share their perspectives. They pull back the curtain on Sierra’s typical trading morning, break down concepts like options trading and highlight the rollercoaster ride of market highs and lows.

They also discuss the profound role of social media in day trading, the importance of discipline and emotional control and the potential pitfalls and real challenges in day trading. Drawing from their personal experiences, they shed light on how they’ve learned to take profits quickly, prevent losses from spiraling and maintain a realistic perspective on potential returns.

Check out this episode on your favorite podcast platform, including:

NerdWallet stories related to this episode:

Episode transcript

Sean Pyles: There was a time back, oh, about 30 years ago when headlines were filled with stories about people using newfangled technology to trade stocks minute by minute from the comfort of their couches. Today, you can trade almost second by second, but that doesn’t mean it’s a good idea.

Sierra Smith: In the beginning it’s definitely not all sunshine and rainbows. When you make mistakes in trading, those are very expensive mistakes that you are making. Especially when you’re doing day trading with options, it’s very volatile, so it’s very much high risk, high reward.

Sean Pyles: Welcome to NerdWallet’s Smart Money Podcast. I’m Sean Pyles.

Andy Rosen: And I’m Andy Newfangled Rosen.

Sean Pyles: Today we have episode two of our Nerdy Deep Dive into next level investing. And Andy, let’s just start out with the caution we mentioned last episode, which is that here on Smart Money, we still think the vast majority of people will have more success with very basic investing strategies, like using the buy-and-hold strategy, investing for the long-term, utilizing low cost, lower risk index funds, seeking out safe returns like high yield savings accounts.

Andy Rosen: You’ll get no arguing from me on that, Sean. But as we noted last time, some people do want to do more on the markets. Maybe they have some playing around money, maybe their risk tolerance is higher than the average bear, or bull. Maybe they’re just curious about all these terms that they hear on the nightly news. Does anyone watch the nightly news anymore?

Sean Pyles: Nope.

Andy Rosen: Yeah, and as we also noted, it’s good to be educated about the different ways investors use the stock market and other markets, because all of it has an impact on the overall economy, which affects everybody.

Sean Pyles: Right. Well, frankly, when I hear the phrase day trading, I just think the odds are really against people. There’s research showing that only about 1% of day traders consistently make money, and some kinds of day trading, like trading options, you can actually lose more money than you put up. If you don’t know what you’re doing or your expectations are not aligned with the reality of what you’re doing, you can get into a desperate situation pretty quickly.

Andy Rosen: It is absolutely true that people can get over their heads quickly, and there are a lot of people on social media that make day trading seem like it’s easier or more profitable than it actually is. Think of it this way, if you were losing a lot of money day trading, do you think you’d go on TikTok and brag about it? I doubt it, right?

Sean Pyles: Probably not.

Andy Rosen: Yeah. If people want to try this, they need to be aware of these percentages and aware of the risks and the time and effort that is involved. You really have to be watching moment to moment to see what’s happening. But the fact is that there are a lot of day traders out there and they do help move markets, so let’s hear from a couple of them to try to understand what they do and how it really works.

Sean Pyles: Let’s do it. But before we get to that, a reminder from the lovely folks on the NerdWallet legal team, we Nerds are not financial or investment advisors, we will not tell you what to do with your money. Everything in this episode and this series is to provide you, our dear listener, with the knowledge to make informed decisions with your own money.

And listener, we want to hear what you think, too. To share your thoughts around next-level investing with us, leave us a voicemail or text the Nerd Hotline at 901-730-6373. That’s 901-730-NERD, or email a voice memo to [email protected]. Andy, who are we hearing from today?

Andy Rosen: We’re hearing from two day traders, one former, one current. Sierra Smith is a trader and social media creator who runs a Discord server where she and other traders talk about strategy, trading concepts, etcetera. She’s based in Houston, and you can find her on TikTok or YouTube as well.

Michael Sincere is an author and speaker about investing topics. Among his books is “Understanding Options” and “Start Day Trading Now.” And he’s also a financial columnist for MarketWatch. He’s based in Miami.

Sean Pyles: Hey, Andy, before we go any further, let’s take a second to talk about what a Discord server is and what it means to run one. A lot of folks might not be familiar with this. You said Sierra does this, right?

Andy Rosen: Right. Without getting into too much detail, Discord is basically a chat service organized around a specific topic or interest group. And they’re particularly popular among video gamers, that’s where the service rose to popularity, but they’ve developed a big audience in the online investing world. Content creators like Sierra will often use Discord servers to connect with their audiences. If you haven’t used Discord, think of it as something like a mixture between Slack or Microsoft Teams with a little bit of Reddit mixed in.

Sean Pyles: OK, cool.

Andy Rosen: Sierra, Michael, welcome to Smart Money.

Sierra Smith: Thank you for having me.

Michael Sincere: Thanks for having me, too.

Andy Rosen: The first thing I want to know is, I guess I’ll start with Sierra, did you do any day trading today?

Sierra Smith: I actually did do some day trading today.

Andy Rosen: Tell me, just as an easy example to pull out of your head, what did you do? Just talk to me about what your morning went like.

Sierra Smith: This morning specifically I did live trading with my Discord server. We got on around 8:15, I marked up three different stocks for them, so that way they could have a variety to choose from if they chose to take some trades. I personally took Apple today, I traded Apple. I took calls, which essentially means that I believe the stock is going to go up, for those who don’t understand options terminology or anything.

Yeah, that’s what my morning was today, day trading. And then afterwards we just did some education. We did some trade recap for some people who didn’t win on their trade, we went over why they didn’t. Yeah, that was pretty much my early morning today.

Andy Rosen: And can you tell me what you saw in Apple this morning, in layman’s terms, that made you feel confident about making those short-term trades?

Sierra Smith: I think Apple was the price in the pre-market. There’s pre-market and post-market, and there’s actual market hours. Pre-market with options you cannot trade. But in the pre-market it was sitting within this demand zone, I believe. And so if it’s within a demand zone, that essentially means that the stock most likely will go up from there.

I just facilitate, I’m going to take Apple calls today, because it’s within that zone, which is the whole chart analysis that we did before the market opened. And so that way when the market actually opened, we were able to take that trade based off of that prior analysis.

Andy Rosen: And Michael, I know you’re not really doing day trading anymore. Tell me what your daily thinking about your portfolio looks like.

Michael Sincere: Right. What Sierra was doing was something I did do in the past, mostly when there was a volatile market. And I would jump on some of the hot stocks and ride it higher. And I stopped it because it’s wonderful when you’re on the right side, but if you’re not, it can turn around really quickly.

To answer your specific question, I switched from day trading to a more traditional buy index funds. And I sell covered calls, which is also an option strategy, but to me it’s a lot less risky than day trading.

Andy Rosen: Just for the people out there: When you sell a covered call, basically what you’re doing, if I’m understanding correctly, is you are selling an option for someone else to buy a stock that you already own. So if your trade doesn’t work out, you at least have the stock to back it up. You’re not going to have to buy a stock at a higher price than you might want to pay for it in order to sell it. Is that accurate?

Michael Sincere: It is, and I’ll give you an example. Let’s say I bought Apple, and then what I would do is I would rent out those shares to Sierra, who’s buying calls. I’m selling those calls to her, she’s buying them. I wouldn’t make as much money on it, but I do get an immediate income. And so what I do is I sell them to the speculators, and I’m like the landlord. I get my income and I just want my nice income and I don’t have to go through the stress of watching it all day long, every minute, can’t even go to the bathroom. That lifestyle I decided to walk away from. But by selling the covered calls, basically Sierra or another speculator, they basically own the rights to it, and they can sell it from me at any time. So I just wait a month or whatever timeline that I decide to sell those calls on.

Andy Rosen: Got it. Maybe you folks have met before, even without knowing.

Sierra Smith: Probably.

Michael Sincere: Absolutely. I hope you enjoyed those calls I made and bought today.

Sierra Smith: I did.

Michael Sincere: Thanks.

Andy Rosen: Let’s go back and hear a little bit about each of you with your origin stories. Maybe start with Sierra. How old were you when you started trading? What made you start? Tell me a little bit about how you got into it.

Sierra Smith: I started trading when I was 18 years old. After I had graduated high school, I had a friend, and he had posted on social media, he had bought his dream car at 18. And I’m like, what? We just graduated high school, so it doesn’t make sense for you to be buying your dream car at that age, or so I thought. And so I asked him, I was like, “What do you do? How did you buy that car?” And he told me that he traded options. And I’m like, hmm. I’ve never heard about options trading before, all I knew was I can buy a stock if I so wanted to.

And so he taught me how to trade options. And then from there I just started trading. I spent a lot of time looking at charts. I’ve just fallen in love with trading. I’ve just been trading, I would say I trade at least four out of five days of the week, even now.

And it’s just because now I think my shift with trading has focused from not trying to trade to survive and make a living and provide for myself, but now it’s just trading just to make some income. And just because I love trading, I really do love what I do. I’m really passionate about it. Because I think when people hear trading, they have a whole negative stigma around it. Or when it comes to financial stuff in general, people get leery. No matter what it is, whether it’s trading or investing or whether it’s buying something off the street, people get a little leery when it comes to putting their money in certain places. I just think being able to de-stigmatize trading as a whole is something that I love to be able to do.

Andy Rosen: You talk about how you love it. What makes you love it? And do you love it every day? There can’t be all sunshine and rainbows, can it?

Sierra Smith: In the beginning, it’s definitely not all sunshine or rainbows. When you make mistakes in trading, those are very expensive mistakes that you are making. Especially when you’re doing day trading with options, it’s very volatile, especially the way that I trade. So it’s very much high risk, high reward.

Obviously, the days that I win, I’m having a great day. I love it then. But obviously those losing days are really hard. After you get more comfortable trading, you realize how to take losses with a grain of salt. Those larger losses, those hurt. But when it comes to options trading, you just have to build up a sort of mental fortitude, especially if you trade the way that I do. While I do agree, there are definitely less riskier ways to trade, that’s just how I personally do it. Because like I said, I’m 20 and I like to make risks. It works for me.

Andy Rosen: Got it. I’m 39 and I use a robo-advisor.

Michael, I know you’ve done a lot of research and writing about various aspects of navigating the financial world, but you’ve done some specific research into the world of day trading. I was wondering if you could give a really quick Cliff’s Notes about how this became a normal part of the financial world. It wasn’t too long ago that regular people could not just log onto their computer and trade stocks on their own. You would’ve had to go through a lot more hoops than you can do now. Can you talk just a little bit about the history and maybe you can segue into how you became acquainted with it?

Michael Sincere: Well, the history goes back to the ’90s, when I was beginning as well. All of a sudden I discovered trading. And I think it started with Netscape, which I think went up an unbelievable amount of money in one day because of something called the internet, which was suddenly discovered. Before, if you were day trading or any kind of trading, it would cost you as much as $100 per trade. And once the internet came and these companies started switching to online trading, it went from $100 per trade to maybe $20 a trade. And as you know, now it’s pretty much free. But that’s when I got involved.

And in the ’90s, the day trading was unbelievable. It seemed like any stock you bought related to internet, you could make $20,000, $30,000 a day. And that’s when it really got really popular. Unfortunately, it all came to a screeching halt when the market, I think it was around 2000, when it all crashed. And all the day traders started losing money. All their money.

I was on these websites and I saw them just panicked as they … I’m trying to think of some of the stocks they bought, but many blew up, like Pets.com and all these others. And people got sick of day trading for many years. The majority did.

And then now it’s made a resurgence again, or at least it did over the last few years. And so Sierra, what she’s doing is it’s, as she said, high risk, high reward. It’s intense. You have to sit, be in front of the computer all the time. And day trading options is even more speculative. And I wrote books on options and on day trading. But when you combine day trading with options, the way options work, they can switch in a minute. You could be up and then the next minute you could be down. I have a lot of respect for anyone who can book a profit.

For me, I was trying all types of trading and decided to write books about it. Because I made so many mistakes, lost so much money at first, and so I was trying to help other people. And that’s when I both wrote books on day trading and options. I think I wrote about eight books on both.

Andy Rosen: I did want to ask, both of you in different ways have made part of your living out of talking about trading, and talking about the financial world with people. And I think this is true of a lot of people who get into this world. There is this content aspect to it. Tell me why you think the public-facing aspect of it seems to be important to a lot of traders, from the influencers to the authors.

Sierra Smith: I know from my experience, I can say I recently started utilizing social media to talk about trading. And so I had made a TikTok about it online, and it blew up and it went viral. And so many people were like, “Oh, I’m super interested in trading, and I would love to learn.” And for the first time in two years I was like, you know what? Maybe I will start teaching. Because I’ve never wanted to teach people about trading. I just would do it by myself and go on about my day. But I think when it comes to the social media aspect of trading, I think people have to see that it works for other people. They have to see how it works, why it works, in order to want to get into it. Because everybody knows you can buy and sell stocks, but no one really knows how profitable it could be or what that looks like on a day-to-day basis. I think the social media projection of it really helps bring people into the trading industry, if you want to call it that.

Sean Pyles: I saw on one of your — I think it was a TikTok video that you made — I saw you talking about how there’s a lot of people on social media that will tell you, “Oh, I did these three trades that I made this amount of money,” and you were warning people it’s not that simple.

Sierra Smith: Yeah.

Sean Pyles: What do you think are some of the pitfalls of social media based investing?

Sierra Smith: I think one of the pitfalls of it is everybody wants to make trading seem like it’s perfect. And then people always want to post what they’ve made in their profits, but they won’t talk about their losses or they won’t talk about what they put in.

I know as far as options goes, it’s a lot about percentage. That’s how I see it. For example, if I tell you guys that I’ve made $10,000 in a day, it’s not because I turned $10 into $10,000. It’s usually because, OK, I made a put at 40, it made 25% on that trade.

I think the pitfall, the major pitfall when it comes to trading and social media, is that people don’t advertise the entirety of what it is. And a lot of people end up getting into trading thinking that they’re going to turn $50 into $5,000 in two days, and that’s just not realistic.

Andy Rosen: Michael, obviously you’re maybe not as active on social, but you’ve done quite a lot of content around these kinds of activities. What’s your perspective on it?

Michael Sincere: Well, first of all, by writing these books I was able to speak to some of the best traders and investors in the world, like Peter Lynch, Mark D. Cook, who passed away. But Mark D. Cook was one of the top option traders in the world, and was successful for many, many years. I used to interview him all the time and he became a friend, so I learned a lot from him. And it took him five years to become successful. It was very difficult those first five years, and he wanted to give up many times trading options. But then he found his system.

And what I learned from him, and my own experience, is it’s really the emotion that gets everybody. It’s really the discipline and emotion. Everyone talks about the discipline, but they don’t really know what it means until they start trading. And what I mean is you’re in a losing trade and you’re ready to lose $10,000. And you have to figure out very quickly whether you close the trade, whether you add more to it, whether you hold, and these are lightning-fast decisions that really hurt a lot of people.

I’m sure Sierra’s gone through this many times. I’ve found from my experience, it’s very difficult. Beginners have high expectations about how easy it is to make money, as Sierra said. But it does take a long time to find your own style. And trading’s not for everybody, too.

And some of the pitfalls I’ve found is, one, a lot of people turn from trading to gambling. It’s very easy to do. You think you’re trading, you’re following everything, but you’re betting way too much money on a trade. Which means, yes, you can make $100,000, but you also could lose that exact same amount if you’re not careful. Which is why I tell people the number one rule is to trade small, especially when you’re beginning. Do not try to make $100,000 in one day, try to make a few hundred. If you can do that consistently over a long period of time, then you may have a shot at it. But if you come in there trying to make big, big bucks, nine out of 10 are going to blow up their account, in my opinion.

Sierra Smith: Yeah, I’m definitely seeing more people fail than succeed when it comes to starting out in trading, and that’s just because so many people think trading is going to be so easy. A lot of people don’t exercise proper risk management, which is something that anybody that’s been trading for a while will tell you to exercise.

Or the way somebody with a larger account size trades is entirely different in the way somebody with a smaller account size trades. For me, I have a larger account size, so I can put tens of thousands of dollars into a trade and be OK with it with the way that I trade. But the strategy that I use may not work for somebody who only has $500 in their account. And so I think a lot of people just assume that you can just make all this money overnight, and they end up just getting so discouraged beyond trading. Which sucks, because trading for me obviously has changed my life, and I think there’s so many good and positives to it, but I just don’t think people are really fully educated on what trading really is.

Andy Rosen: I do want to get back to some things that might help those beginner level people who just know this term and want to get a sense of it. Michael, if you would be willing, could you just tell us a little bit more about how you moved off of day trading? You talked a little bit just about the lifestyle and why it didn’t work for you, but just a little more detail on how your views evolved would be awesome.

Michael Sincere: I kept coming back to the fact that the strategy that worked again and again — and I used to have long conversations with John Bogle as well, who was the father of indexing — and I found out that over and over I was making more money on a longer-term basis just by buying and holding these index funds. At the same time, I was trying to make fast money using the strategies Sierra’s using, like momentum trading. And I actually did do option trading with momentum. I found it extremely stressful. I found out I had to devote entire days to it. I tried to get out by noon. That was my goal each day, get in at the open, ride it and then get out. And yes, on the good days, I’d make pretty good money. I’d make $10,000 on good days. Once I made $30,000 and I was riding high. Three days later, I believe, I lost it all.

I found out after about a year of this, it was not for me. You have to know your own personality. And I found, for my personality, I couldn’t take the stress of it every day. And so I pretty much stopped day trading, and I wrote books on helping people manage the risk part of it. Anyone can learn about the technical aspects of it, like the charting and the indicators, but it’s the emotions that are the difficult part to manage. That’s what really ruins most people. I emotionally did not have what it takes to be a professional day trader, especially a momentum trader. And I saw that it was easy to blow up my account. And some days I’d blow up that day or that week, and I got out of it.

Andy Rosen: Sierra, it must also take nerves of steel to stop after a couple minutes. If you’re doing well, it’s probably tempting to say, oh, I could get more. Right? It seems like one of the things you’re describing is managing that and knowing when to stop. I would love to hear either one of you talk about when to stop. When it’s time to stop, whether you’re having a good day or a bad day. When it’s prudent to take a deep breath.

Sierra Smith: One thing I always tell my students is that when it comes to day trading, green is green. It doesn’t matter if you made $500 or $5. Because I promise if you saw $5 on the ground, you would pick it up. I think I have lost so much money in the markets just holding out on trades and just like, hey, you know what? It’s going up. I could hold this out for five more minutes, 10 more minutes, and then it ends up reversing back down against my trend. And the minute that I see I’m in profit enough that I’m happy with, I will end my trade. And I think the reason why I trade like that, again, is because I’m at a point where it’s not like I’m trading trying to compound my account and secure my lifestyle.

That’s all said and done now. I feel like now my trade’s very relaxed. It’s just get in, get out, make something for today, and then go on about my day. That’s why I’m OK with just being in trades for a few minutes. Sometimes I will exit a trade and then the stock will run three more dollars and I’m like, man, I could have made so much money. But as long as I left with something, I’m good.

Andy Rosen: And what about on a bad day? There’s got to be a temptation to chase a loss to try to get it back. How do you manage that?

Sierra Smith: I have trading rules, actually. I have personal rules for me when it comes to trading. If I take a loss, I’m just going to be done for the day. Honestly, I could have a risk or a probability of being able to make that back, but I would rather take one loss than take two losses or three losses trying to keep revenge trading and get that back. Lost a lot of money doing that also. I’ll no longer be doing that when it comes to trading. I just think when you take a loss, you have to make sure that you don’t let your losses lose that battle, if that makes sense. Obviously you have to have a stop loss and proper risk management, so that way it’s not like when you do lose, you’re losing your entire account size every single time.

Andy Rosen: Tell me, if there are listeners out there who are thinking, this sounds fun, this is something I might be interested in, I would like to try it out, where do you recommend people start? What’s the first step someone should take? Thinking of someone who might not even have a brokerage account and just wants to figure out if day trading is something they could ever do.

Sierra Smith: I think people who want to start, should start with not by learning anything about brokerage accounts or charting or anything, I think they just need to learn what trading is and what trading is not. Because I know a lot of people want to start when they hear how much money that people have made, but they have to understand what trading is. What trading really is and what it isn’t.

And then after that, I say people need to start with just looking at charts and just seeing if they can find some that make sense to them. And the biggest thing that helped me learn how to trade was having somebody who walked through it with me. Because you have to know what type of learner you are. Some people can read books on options training and learn. Some people watch videos, some people need one-on-ones with people. So just figuring out how you learn and using that and applying that to the trading world.

Andy Rosen: Michael, what do you think?

Michael Sincere: I think that people should, again, as I said, start small. I think if they know nothing about the market at all, they should start with opening up an account, starting with index funds or mutual funds. Start at that level. They really need to understand the stock market first. If you want to become a day trader of stocks, do a small amount, open up. But you have to start with the brokerage account, you have to learn the different aspects. And that means learning about the indicators and learning there’s a lot to the market that a lot of people don’t know.

Now, eventually, if you want to trade options, you should first start by learning the different aspects of options. There are great books on trading and on investing with options. But again, there’s no rush. If you’re coming in trying to make big money fast, that may not turn out so well. Basically, become a student of the market.

Andy Rosen: Both of you. Thank you so much for coming onto the show and telling us about your perspectives. Thank you so much.

Michael Sincere: Thank you.

Sierra Smith: You are so welcome. Thanks for having me.

Sean Pyles: Hey, Andy, I’ve got to tell you, I am pretty torn after hearing that conversation. Sierra seems to be living a super cool and successful life at such a young age. And there’s part of me that wants that, but there’s another much more rational part of me that knows that it’s just not realistic.

You hear about all the money she’s made, and it can be easy to forget that the vast majority of day traders lose money. I really view Sierra’s narrative as a cautionary tale, maybe, for her followers online more than for Sierra herself, because people might view her TikToks or courses, or those of another day trader, and think that this is a secret path to instant wealth, but it’s really not. Again, in all likelihood, you’re going to lose money if you do what Sierra does.

Andy Rosen: Sean, I think I have to agree. Obviously, Sierra does seem to be living a super cool life. She seems to be having a really good time, and that’s her life. And a lot of people have tried this and had very different results. And so, yeah, you might wind up like her and you might envy her, but on the other hand, you could wind up like the majority of traders and not get the kind of results you’re looking for, or wind up losing something that’s important to you.

You may be able to improve your chances by doing very scrupulous research, paying really close attention to your investments and how they’re performing moment to moment. But on the other hand, your research may lead you, as it seems to have done Sean, to the conclusion that this investing style isn’t for you. Maybe you don’t even have the time for it. And many people spend hours doing this every day and still lose money. As we said before, those are not the people you tend to see promoting their trade as much as the winners do.

Sean Pyles: No, and that’s why at the end of the day I know that I’m much more of a Michael than a Sierra. I love to do some research and have a solid understanding of what I’m going to be doing with my investment strategy. Plus, like Michael, I do not have the emotional fortitude to weather the big ups and downs that Sierra experiences on a daily or hourly basis.

All right, well Andy, how about a preview of what’s coming up in episode three of this series? Are we going to Vegas?

Andy Rosen: Well, some people would say we are, because we’re talking about options trading, short selling, derivatives, and contracts, all of which can have huge upsides and huge downsides. But they’re also very important in the market, so it’s worth hearing how they work, who might want to include them as part of a diversified portfolio, and how to know when it’s time to leave it to the pros.

Sam Taube: The risk and reward tends to be a lot higher than with just stock ownership. Because generally, with derivatives trading, you’re either going to get a big payout, double your money or something like that, or you’re going to lose everything you invested in a particular contract.

Sean Pyles: For now, that is all we have for this episode. If you have a money question of your own about investing or anything else, turn to the Nerds and call or text us on the Nerd hotline at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]. Visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate and review us wherever you’re getting this podcast.

Andy Rosen: This episode was produced by Tess Vigeland and me, Andy Rosen. Sean and Liz Weston helped with editing. Chris Davis helped with the fact-checking. Kaely Monahan mixed our audio. And a big thank you to the folks on the NerdWallet copy desk for all their help.

Sean Pyles: Here’s our brief disclaimer one last time. We are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes, and may not apply to your specific circumstances. And with that said, until next time, turn to the Nerds.

Source: nerdwallet.com

Apache is functioning normally

August 14, 2023 by Brett Tams

Key takeaways:

Investing is a way to increase your wealth based on your risk tolerance and time horizon
The best investments for low-risk investors looking for moderate returns are index funds, government bonds, and high-yield savings accounts
The best investments for high-risk investors that want high returns are individual stocks, real estate, and cryptocurrencies

Investing is one of the best ways to grow your wealth and improve your financial future. One of the keys to finding the best investments is to recognize the power of compound interest. The credit bureau Experian® describes compound interest as “when interest gets added to the principal amount invested or borrowed, and then the interest rate applies to the new (larger) principal.”

There are many ways you can invest, and some investments earn more than others, and some investments are riskier than others. Today, you’re going to learn about the nine best investments in 2023 based on average returns as well as your personal risk tolerance.

The investing information provided is for educational purposes only. We recommend consulting a financial professional before investing.

The best investments

The best investments right now to grow your wealth include:

High-yield Savings Accounts
Short-term Certificates of Deposit (CDs)
Government Bonds
Corporate Bonds
Real Estate and REITs
Individual Stocks
Index Funds
Exchange-traded Funds (ETFs)
Cryptocurrency

1. High-yield Savings Accounts

High-yield savings accounts are similar to a regular savings account, but you’ll often earn more interest by keeping your money in one of these accounts. You can sign up for a high-yield savings account through many banks and credit unions, and some accounts can earn you anywhere from three to four percent annually.

If you have or plan on making an emergency fund, Javier Simon from SmartAsset recommends using one of these accounts. “Anyone looking to open a rainy day or emergency fund that provides a higher-than-average interest rate and high liquidity should consider a high-yield savings account,” writes Simon. You’re saving anyway, so why not make money from storing your funds?

Best investment for: People with lower risk tolerance and who are good at saving. This is one of the safest investments with high returns because many banks are FDIC insured, so even if the economy has a downturn, your money is backed by the government.

Risk level: Very low

How to invest: Banks, credit unions, and online banks

Potential returns: Moderate

2. Short-term Certificates of Deposit (CDs)

When looking for where to invest money, many people turn to certificates of deposit, which are also known as CDs. Like high-yield savings accounts, CDs are another type of account. CDs work by allowing you to deposit your money with the caveat that you don’t withdraw the money for a certain amount of time. Once that time frame expires, you’ll receive your money back as well as the interest.

Best investment for: People willing to store their money for one, three, or five years, which are the average predetermined time frames. Just remember, unlike a savings account, there’s a fee for withdrawing your money early.

Risk level: Very low

How to invest: Banks and credit unions

Potential returns: Moderate returns that sometimes exceed those of high-yield savings accounts

3. Government Bonds

Sometimes, the government needs to borrow money, so they offer people the option to loan them money via government bonds. Like CDs, these bonds are for a specified period, but they provide regular payments. Peoples sometimes use bonds as one of the best passive income investments due to these payments.

One caveat to note is the return on government bonds varies depending on how the economy is doing.

Best investment for: People with a low risk tolerance often buy government bonds. Unless the government fails, there’s not much that will prevent getting your return from this investment. Unlike other investments, government bonds can last for up to 30 years.

Risk level: Very low

How to invest: The United States Treasury or through a stock broker

Potential returns: Low

4. Corporate Bonds

Like government bonds, corporate bonds are loans, but you’re providing that loan to a company. This investment helps companies that need money to invest in new products and expand their business. Since these aren’t backed by the government, they can be riskier because the company may go out of business. Although these have a higher risk, they also have a higher return than government bonds.

Best investment for: Individuals with a higher risk tolerance and are looking for higher returns may want to invest in corporate bonds. These bonds pay out regularly, and they’re a safer investment when buying bonds from large, stable companies that have been around for a while.

Risk level: Moderate to high

How to invest: Stock brokerages

Potential returns: High

5. Real Estate and REITs

One of the investment ideas many people turn to is real estate because it can provide extremely high returns when the housing market is good. The downside is that when the housing market has a downturn, as we saw in 2008, people experience big losses.

Rather than investing in real estate, you can invest in real estate stocks, which are called real estate investment trusts (REITs). These stocks are for companies that own properties like malls, office buildings, and other forms of real estate that generate revenue. These can be slightly less risky but still have some risk due to the nature of real estate.

Best investment for: Those who are looking for high returns or have a diversified portfolio already and can weather some higher-risk investments.

Risk level: High

How to invest: Mortgage broker for real estate and stock brokerages for REITs

Potential returns: High

6. Individual Stocks

Individual stocks are available to everyone, and when the average person buys these types of stocks, they’re known as “retail investors.” You may have heard of retail investors investing in individual stocks during the GameStop stock hype of 2021, which also showed how risky individual stocks can be.

Individual stocks come with a high risk and high reward. Basically, you’re buying a portion of a single company, also known as a share of the company. Numerous factors dictate the price of a stock including the profits or losses of the company as well as speculation of the future of the company.

Best investment for: People who are looking for higher returns and don’t mind the risk may want to invest in individual stocks. These stocks can involve doing a lot of research into a company in order to make a quality decision. It’s possible for single stocks have the potential for large returns and losses. For example, investing in Amazon (AMZN) in 2018 and selling in 2021 would have over a 100 percent return, but buying in 2021 and selling in 2022 would have a 50 percent loss.

Risk level: High

How to invest: Stock brokerage

Potential returns: Low to high

7. Index Funds

Index funds are a type of stock, but rather than owning one stock, you’ll own multiple stocks. These stocks track a specific market, like the S&P 500 or the Dow Jones. When purchasing an index fund, there are often low fees and steady returns. The famous investor and founder of The Vanguard Group, John C. Bogel, popularized investing in index funds. This type of investing is popular because indexes like S&P 500 index funds track the 500 largest companies in the United States.

Best investment for: People who are new to investing as you don’t need to regularly check in and research different companies because index funds track the top companies in the U.S.

Risk level: Low

How to invest: Stock brokerage companies

Potential returns: Moderate

8. Exchange-traded Funds (ETFs)

Exchange-traded funds (ETFs) are similar to index funds because your single stock has shares of multiple companies, but ETFs are usually for specific industries or categories. For example, ARK Invest is a well-known ETF that often invests in technology companies, and there are other ETFs that have an assortment of bonds, like Vanguard’s Bond Market Index Fund (BND).

Best investment for: People with a moderate level of risk tolerance. ETFs can be thought of as a mix between index funds and individual stocks since they’re riskier than index funds, but they’re less risky than individual stocks because you’re more diversified.

Risk level: Moderate

How to invest: Stock brokerage

Potential returns: Low to high

9. Alternative Investments

Cryptocurrency trading is a hot topic, but many people don’t fully understand how it works. Cryptocurrencies are a digital form of currency that’s traded on a network known as the blockchain. The first cryptocurrency was Bitcoin, and now, there’s an endless number of cryptocurrencies. Many people have become millionaires or billionaires from investing in crypto, but it’s an extremely volatile market, and many more have also lost their life savings.

Currently, there is very little to no regulation around cryptocurrency, and much of the investing involves speculation. Notable investors like Warren Buffett and his business partner Charlie Munger have been highly critical of crypto investing, calling it, “worthless, artificial gold.”

Best investment for: People with a high risk tolerance and can tolerate losing their investment may find high returns with crypto investing.

Risk level: Very high

How to invest: Crypto exchanges

Potential returns: Very high

How to Choose the Best Investments

There’s no single right way to choose the best investments because it’s dependent on your unique situation. To make the best choice for yourself, you’ll need to assess your personal risk tolerance and when you’re hoping to cash out on your investments.

1. Assess Your Risk Tolerance

When it comes to investing, the higher the risk, the higher the reward, but it can also mean bigger losses due to unforeseen circumstances. While looking at the top nine best investments, consider how risky they are and whether or not they’re right for you. If you’re concerned about losing money and simply want steady, average returns from your investments, you may want to choose investments that are lower risk.

2. Gauge Your Time Horizon

An important aspect of investing is when you plan on needing the returns from your investment. Many people invest as a way to save for retirement, but some people invest in order to make money to pursue another goal, like purchasing a new home or going on a big trip. For those with a longer time frame of 10 or more years, you can tolerate making low-risk investments with steady returns. If you need the returns sooner, you may want to look into taking more risks.

A simple way to invest based on your time horizon is to use target date funds. The United States Securities and Exchange Commission describes target date funds as being “designed to be long-term investments for individuals with particular retirement dates in mind.” With this type of fund, you set the date you plan on retiring or selling your investments, and it will automatically adjust for risk.

3. Recognize Your Personal Investment Knowledge

Investing does come along with some risks, and these risks vary depending on which type of investing you do. For example, investing in a high-yield savings account is much less of a risk than investing in individual stocks. As a way to minimize your risk and be fully aware of the risks you’re taking, it’s helpful to educate yourself further on each investment and gauge your personal knowledge.

There’s always room to grow your investing and personal finance knowledge. Even the greatest investors in the world continue to learn as much as they can about investment strategies.

4. Assess How Much You Can Budget for Investing

When getting started on your investment journey, it’s often a good idea to minimize your debts as much as possible before creating a budget. For example, if you have a high amount of credit card debt, the interest you’re paying will counteract the money you’re putting into different investment opportunities.

Once you have minimal debt, you can create a budget to see how much you can invest each month. With many of the investments covered here, you can set up automatic investments to make the process a little easier as well.

Best Investments: FAQ

Now, you know about various investments as well as the risk associated with each one. The following are some additional frequently asked questions to help you get started with investing.

What Is Compound Interest?

Compound interest is when the money you make from interest starts making you additional money as well. For example, with a 10 percent interest rate, $1,000 would make you $100. The following year, you’d earn 10 percent interest on $1,100 because that extra $100 you earned will earn interest as well.

Without investing anything else, your original $1,000 investment will be more than double your original investment in 10 years.

Which Investment Gives the Highest Returns?

Investments that have the highest return opportunities include real estate, individual stocks, and alternative investments like cryptocurrencies. Just be sure to keep in mind that these investments also come with the most risk.

Is It OK to Invest During Times of Uncertainty?

Investing during uncertain times can bring better-than-average returns later on. Marcus by Goldman Sachs recommends taking the long view when making your investments. Even during a bad economy, historical data shows that it eventually recovers. You’ll just need to assess your risk and decide if you can weather the storm until it rebounds.

Should You Invest with Bad Credit?

Investing is a way to save for your retirement or future purchases, and it can increase your overall net worth. If you have bad credit or a lot of debt, it may be best to wait on investing because that money could go to paying off debt, improving your credit, and increasing your financial security.

If you need help improving or repairing your credit score, allow Credit.com to help. We have services like ExtraCredit, and we can also provide you with a free credit report card. We’ll be there to help you learn how to improve your credit as well as other ways to increase your wealth, so sign up today!

Source: credit.com

Apache is functioning normally

August 13, 2023 by Brett Tams

Home prices have increased a lot over the past year and change. So much so that some prospective buyers are pumping the brakes, or at minimum, making sure the property they buy is really something they want to live in for the foreseeable future.

It’s kind of like the stock market. A year ago you could buy practically anything and realize a solid gain. Picture a dartboard. Today, you’ve got to be selective if you want to book a good return on your investment.

Of course, homes aren’t just investments. They’re for living in too, so today’s buyer should be really happy with the home in order to go through with the purchase, seeing that the price might not immediately surge higher.

The latest REALTORS® Confidence Index, which surveys more than 3,000 Realtors, found that the market is slowing, particularly because of higher home prices and a lack of inventory.

Respondents noted that buyers are approaching sellers as if it’s a buyer’s market when it’s in fact a seller’s market, meaning their lowball offers are going nowhere.

At the same time, appraisals are becoming an issue again, perhaps because home prices increased too much too quickly, and banks and lenders just aren’t willing to lend at such high valuations just yet.

The takeaway is that home prices are beginning to get tested. Perhaps we got a little ahead of ourselves. Time will tell.

Expectations for Home Price Growth Are a Bit More Muted Today

Over the next 12 months, Realtors don’t see home prices gaining all that much, especially in areas where inventory constraints aren’t an issue.

They believe the median national home price will rise 4%, with most states expected to chalk gains between 3% and 5%.

However, some states are still on track for even bigger gains thanks to a lack of inventory and strong home buyer demand.

For example, in Florida expected home price growth is 5-7% over the next 12 months thanks to both low inventory and all-cash sales.

Conversely, in states where income growth has been low, annual home price gains are expected to fall below 3%, which sure doesn’t sound like a compelling reason to purchase a home.

Unfortunately, affordability is rearing its ugly head again, even with mortgage rates still hovering around the very low 4% range.

But for many states, the best seems to be behind them, with more modest growth ahead. If you take a look at the map above, only a small handful of states are slated to see continued strong home price appreciation.

The winners include:

– California
– Florida
– Georgia
– Hawaii
– Nevada
– Oregon

The losers include:

– Arkansas
– Connecticut
– Iowa
– Kansas
– Kentucky
– New Mexico
– Wyoming

And by loser, I mean Realtors don’t even expect home prices to rise 3% over the course of a year. So if you’re buying in one of those states and your agent says it’s a great time to buy, ask them why.

At the end of the day, buying a home today is more about necessity or wanting to own as opposed to rent, not so much about the potential windfall.

Sure, time should heal all wounds as far as paying too much, but you might want to look at other investments if it’s purely a spec play.

Source: thetruthaboutmortgage.com

Apache is functioning normally

August 13, 2023 by Brett Tams

Intercontinental Exchange got a step closer to realising seven-year-old dreams of transforming the US home loan market this week, after a US regulator dropped opposition to its $12bn takeover of mortgage software specialist Black Knight.

For others in the mortgage market, however, the move has failed to allay anxieties about the control ICE will have over technology that could become the backbone of a fragmented $12tn industry.

Last Monday, the Federal Trade Commission agreed to end a court case aiming to halt the ICE-Black Knight deal on competition grounds. The move followed two planned divestitures of Black Knight units. A final settlement is due later this month.

Under founder and chief executive Jeffrey Sprecher, Atlanta-based ICE has grown from operating commodity exchanges and clearing houses to becoming a vast data-centric business that ranges from bond prices to running the New York Stock Exchange — and now the mortgage industry.

ICE obtained control of mortgage data repository MERSin 2016 and bought loan origination platform Ellie Mae for $11bn in 2020. The deal for Black Knight would mark its largest-ever purchase and bring cumulative investment in the mortgage industry to more than $23bn.

The attraction for ICE is the chance to apply its experience automating markets to a notoriously complex process.

More than 4,000 lenders provided home loans in the US last year, 60 per cent of which were made by independent mortgage companies, not banks.

Applying for a loan is cumbersome, involving several rounds of discussions over paper documentation such as tax returns and credit scores — all as the lender’s own borrowing costs shift along with interest rates, which have more than doubled in the past two years.

After a deal is completed, loan payments need to be monitored, while regulations stipulate documents must be stored for several years.

“There’s only a single-digit percentage of mortgages today in this country that have gone through a digital note process. That’s the opportunity,” Sprecher told an industry conference two months ago. “Our goal is to be able to provide software that can underwrite a mortgage while you’re filling out the application. Right now, it’s about a 60-day process even for the most eligible and capable.”

The potential for a streamlined process has excited many in the industry, particularly smaller players who do not have the means to develop their own technology, while high interest rates have weighed heavily on the demand for new home loans.

Black Knight’s remaining units, after the divestitures, include market data as well as products that help with post-deal administration of loans.

“They’re definitely going to be a major player,” said Patrick Moley, analyst at Piper Sandler. “When you combine ICE’s expertise in electronification of fixed income and capital markets, and an outdated mortgage industry, it is a good business over the long term if they can succeed in reducing some frictions in the industry.”

ICE estimates about 30 per cent of its revenues will flow from its mortgage tech unit after the Black Knight deal, with a bigger share of those coming from recurring sources such as software leases.

This would leave the group less exposed to housing market ups and downs, especially at a time when climbing interest rates have weakened housing market activity. Operating profit in ICE’s mortgage tech segment was $99mn in the second quarter, down by 28 per cent from a year before.

Beyond the potential to streamline the industry, ICE executives have also discussed building tradeable products based on the company’s new data trove.

Last year ICE launched mortgage futures based on its own index tracking mortgage rates, as an interest rate-hedging tool

“What ICE is really good at is monetising data, and this gives them even more data to monetise,” said Andrew Bond, senior equity research analyst at Rosenblatt Securities.

Yet the deal faces strong reservations in the US mortgage industry, where small lenders are particularly worried ICE’s dominance will make it hard to switch technology providers and could add to their costs. When the FTC sued to block the deal in March, it said it would drive up costs to lenders and homebuyers.

“Our members feel very vulnerable because these services are so integral to their operations and the transition is so difficult and problematic,” said Scott Olson, executive director of the Community Home Lenders of America, whose members have reported bundling pressure from ICE, where they are pushed to buy services they do not want in order to get the ones they do.

ICE did not respond to a request for comment on this point.

Black Knight is in arbitration with PennyMac, one of the largest standalone lenders, over what it felt were anti-competitive practices designed to maintain Black Knight’s market-leading position.

David Stevens, a former head of the Mortgage Bankers Association and a Federal Housing Administration commissioner in the Obama administration, worked directly with ICE officials as a board member of MERS when the exchange group took control. He also expressed reservations about the Black Knight deal.

“I’m a big fan of ICE. They’re really smart people but this is related to fundamental [market] implications,” he said. “Here we have a very sophisticated, very competitive company being given the opportunity to become the largest monoline entity in the mortgage technology space, which could theoretically begin to crowd out newcomers.”

Financial risk specialist Clifford Rossi, a veteran of several large lenders and professor at the University of Maryland, suggested financial regulators could make a strong case for designating ICE as systemically important because of its expansive mortgage market reach — a label that involves additional oversight.

“By concentrating the technology solution in the hands of, say, one or two providers, it puts more pressure on the [system] plumbing,” he said, adding: “If there is a hiccup in the origination or in the servicing process, that can have pretty significant adverse impacts on not just the companies, but also on the customers downstream.”

Source: ft.com

Apache is functioning normally

August 13, 2023 by Brett Tams

From stately mansions adorned with exquisite details to modern marvels designed for seamless contemporary living, Westchester County, NY, stands as a haven for potential homebuyers seeking luxury living. If you’re already on the hunt for a home in the area, or just starting to think about living in White Plains, NY or another city in Westchester County, you’ll find yourself surrounded by an array of exquisite features and amenities.

As you embark on a journey to explore the finest homes this area has to offer, this Redfin article will guide you through the realm of exquisite features that define luxury living in Westchester County. From elegant architectural details to cutting-edge amenities, we unveil the luxury home features that await you.

Top neighborhoods with luxury home features in Westchester County

While Westchester already has a lofty median sale price of $745K, surpassing the national median by over $300,000, Scarsdale, Rye, Irvington, Bronxville, and Larchmont stand as renowned enclaves, synonymous with luxury real estate. Each exudes its distinct charm, where homebuyers are willing to pay premium prices.

Bronxville tops the list for most expensive area, with a median sale price of two million as of June 2023. Known for its vibrant community, Bronxville boasts timeless Tudor-style homes, Mediterranean villas, and proximity to Manhattan – it’s no wonder homebuyers are willing to pay top dollar.

Scarsdale, which saw a median sale price of nearly $1.83 million in June 2023, is known for its majestic Colonial-style residences set against lush backdrops grace the landscape, often featuring sprawling lawns and grand facades. Rye, on the other hand, boasts an exquisite mix of architectural styles, from classic Colonials to elegant Tudors, many accompanied by breathtaking waterfront vistas and with a median sale price of nearly $1.8 million.

Meanwhile, Larchmont charms with its coastal allure, characterized by elegant shingle-style homes and captivating waterfront panoramas that sold at a median sale price of $1.63 million.

With a median sale price of nearly one million, Irvington presents a blend of historic elegance and modern grandeur, showcasing stately Victorian mansions and contemporary estates, harmoniously coexisting amidst tree-lined streets.

Recent trends highlight the remarkable demand for these luxury areas, with competitive homes selling up to 500K over their asking prices. Limited supply and high demand lead to bidding wars, while unique features, location, and investment potential can justify the premium.

1. Three-to-four car garage

Luxury homebuyers value 3-4 car garages for their practicality and versatility. These spacious garages offer secure parking for multiple vehicles, protecting vehicles from the elements to preserve value and ensure their condition. Beyond car storage, the extra space allows for organized storage, maintaining a clutter-free living environment. The additional space can also be repurposed as a workshop, providing a creative space for hobbies or projects.

2. Large walkout basements

In Nashville, upscale residences commonly feature expansive finished basements boasting notably high ceilings. These spaces not only increase overall living space, allowing homeowners to adapt the space to their liking. Whether it’s a bonus room, home theaters, fitness centers, home bar, or game room, this space transforms into an extension of the main living areas, amplifying the overall lifestyle experience while offering dedicated spaces for leisure and hobbies.

3. New kitchen

Another popular luxury home feature in Nashville is a new open and bright kitchen with high-end appliances that enhance cooking efficiency and convenience. Quality materials, from countertops to cabinetry, create an ambiance of enduring sophistication. With ample space for preparation and gathering, thoughtful design to ensure effortless organization, seamlessly integrated seating areas and counters, elegant finishes and intricate details render the kitchen a true centerpiece—the epitome of the phrase “heart of the home.”

Luxury kitchens are commonly equipped with an extra-large fridge and multiple dishwashers. This offers homeowners a spectrum of advantages, combining practicality, convenience, and elevated living. The ample space of an extra-large fridge accommodates groceries, fresh produce, and culinary essentials, reducing shopping frequency and preserving food quality. Multiple dishwashers streamline post-meal cleanup, particularly during large gatherings, ensuring continuous efficiency and a well-maintained kitchen.

If you’re buying a luxury home in Westchester County, NY, your Redfin Premier Agent is equipped to offer valuable insights into the local market, including insight into the neighborhoods, highly sought-after amenities, pricing trends, and available luxury properties.

Source: redfin.com

Apache is functioning normally

August 13, 2023 by Brett Tams

Manufactured, HELOC, Automation, Home Insurance Products; Wholesaler Earnings and News; Inflation and Rates

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Manufactured, HELOC, Automation, Home Insurance Products; Wholesaler Earnings and News; Inflation and Rates

By:
Rob Chrisman

Thu, Aug 10 2023, 10:02 AM

A general discussion topic of those here at the MMLA conference in Michigan is the ups and downs we’re all facing. While mortgage applications drift down, and industry headcounts go down, and towns on Maui like Lahaina burn down, here’s something that isn’t going down: credit card debt. Talk to any underwriter or loan officer and they will tell you that loans have become more difficult, in part because of borrower debt loads, and sure enough credit card balances hit $1.03 trillion in the second quarter. And it ain’t going down. The number is up 4.6 percent from $986 billion in the preceding three-month period. For some good economist’s perspectives and interest rates in general, and one capital markets guy’s, tune in to “Unparalleled Insights into Trends and Bold Predictions” with Selma Hepp (CoreLogic’s Chief Economist), Michael Fratantoni (MBA’s chief economist), and Rob Chrisman” on Wednesday August 16th at 1PM ET/10AM PT, sponsored by TrustEngine. (Today’s podcast can be found here and is sponsored by SimpleNexus, an nCino Company, developer of mortgage technology uniting the people, systems, and stages of the mortgage process into one seamless, end-to-end solution. Hear an interview SimpleNexus’ Jay Arneja on closing technology initiatives, standardization, and digital transformation impacting the industry at the moment.)

Lender and Broker Software, Products, and Services

Mortgage leaders: The home insurance market is facing unprecedented volatility with carriers declining new business and increasing premiums to an all-time high. This can delay closings and even lead to DTI exceeding acceptable limits once accurate insurance costs are factored in. Matic, a home insurance marketplace built for the mortgage industry, helps borrowers save time by shopping multiple A-rated carriers at once and providing transparent pricing and coverage options. With flexible integration options for your company, Matic adds visibility and control, allowing lenders to foresee potential issues that could result in delayed closings. To learn how mortgage enterprises can gain efficiencies and add a new source of revenue with Matic, book a demo today. For more strategies on how to navigate the next phase of the housing market, get Matic’s latest report.

While free origination tools are tempting, they can come with hidden costs, including slowing down the mortgage process, increasing turn times, and halting productivity. Blend’s robust, comprehensive features, intuitive personalization, and automated workflows have proven results: 37% increase in transaction speed, 7 days cut from the loan lifecycle and 34% increase in pull-through. Click here to find out how Blend’s Mortgage Suite helps deliver value during every step of the process.

Problem! Your employees are wasting valuable time on tasks that aren’t generating your business revenue! Solution! Automate the time-consuming parts of the mortgage origination process with Velma Connector! Connector is an easy-to-use, rules-based automation tool that enhances your LOS! Need to put your ECOA process on autopilot? Connector takes the human element out of it. Want to know which loans need attention before it’s too late? Connector will send you the report. Want to automate borrower communications and info collection? Connector hits the send button for you. Stop wasting time and money on manual processes! Get Velma Connector today!

“Turn fixed costs into variable costs on a dime. When the market zigs, lenders need the flexibility to zag. Richey May Advisory brings the mortgage industry expertise and agility you need to convert fixed costs into variable costs. Our difference maker is your ability to outsource services to highly trained experts in a model that fits your needs. Whether that means loan-level accounting, advisory, business intelligence, compliance support, cyber services, internal audits, or underwriting automation, we have the tools, knowledge, and experience to deliver value and improve your financial performance unlike any competitor, anywhere. You’ll feel it almost immediately in your day-to-day operations. Even better, you’ll notice the difference in your bottom line. Reach out or visit our website to learn more about how we can help your operation.”

TPO Programs for Brokers and Correspondents

“Going to California MBA’s 2023 Western Secondary conference? Let’s get together and innovate! Deepen your product lineup with Planet’s Renovation and Manufactured Housing loan programs. Help your clients address today’s housing challenges by adding buydowns and USDA loans to your product mix. We make it easy and profitable to offer niche products. Reach out to Regional Sales Managers Tiffany Ta / 714-376-3214 or Jennifer Salsbury Caldwell / 909-225-8444 to explore new products to build your sales.”

Looking to gain a competitive advantage in today’s tough market? Lenders across the industry are catching wind of HELOC benefits and leveraging this tool to increase their book of business. Let us help you get a leg-up on the growing competition. Symmetry’s Piggyback, Post-close, and Stand-alone HELOCs are unlike any other HELOCs on the market, offering service, speed, simplicity, and pricing that stands up against the competition. Here are just five of the ways Symmetry’s HELOC solutions can help you win and keep more borrower business: cash for borrowers, jumbo avoidance, more second home business, increased condo business and client retention. Symmetry is ready to help you build a strong, resilient growth strategy: Contact your area manager or email us to get started!

Wholesaler Earnings and TPO News

Someone in residential lending is making some coin besides Freddie Mac and Fannie Mae ($2.9 and $5.0 billion respectively in the 2nd quarter).

Last week we learned that Rocket Companies (which, as the name implies, contains several companies) generated total revenue, net of $1.236 billion and net income of $139 million. “Generated total adjusted revenue of $1.002 billion and adjusted net loss of $33 million, or an adjusted loss of $0.02 cents per diluted share.”

Focusing on mortgage banking, “Rocket Mortgage generated $22 billion in mortgage origination closed loan volume with a gain on sale margin of 2.67 percent. Rocket gained purchase market share in the quarter, both year-over-year and quarter-over-quarter. Servicing book unpaid principal balance, which includes subserviced loans, was $504 billion on June 30, 2023. As of June 30, 2023, our servicing portfolio includes 2.4 million loans serviced. The portfolio generates approximately $1.4 billion of recurring servicing fee income on an annualized basis.”

Yesterday United Wholesale reported second quarter earnings with origination volume climbing to $31.8 billion, was up 43% compared to the first quarter and up 6.4% compared to a year ago. “Gain on sale margin compressed to 88 basis points in Q2 compared to 92 in Q1 and 99 a year ago. Purchase volume was 88% of total volume. UWM is guiding for third quarter volume to come in between $26 and $33 billion, and gain on sale to range between 75 and 100 basis points. Adjusted earnings per share came in at $0.11, which covers the $0.10 dividend. At current levels, the stock has a dividend yield of 6%.”

Speaking of UWM, “spec pools” are indeed a thing as certain investors pay up for certain loan attributes that the investor desires. In this case, UWM announced “sharper pricing on loans under $200,000, in addition to major enhancements to its Control Your Price program on non-agency Jumbo loans… UWM has removed loan-size pricing adjustments on loans under $100K and will be paying up premiums for market-based pay-ups on 30-year fixed conventional loans $200K and below.”

“UWM also announced it has increased the number of Control Your Price basis points brokers can apply to Jumbo loans, up to 40 basis points. UWM will also double or triple the Control Your Price basis points brokers apply on all non-agency Jumbo loans, up to 120 basis points.”

The FHFA, which is the conservator of Freddie and Fannie? FHFA Working Paper 23-04: How Do Students Value an Elite Education? Evidence on Residential Location and Applications to NYC Specialized Schools.

Pennymac is aligning with the adoption of Fannie Mae/Freddie Mac Form 1103, Supplemental Consumer Information Form (SCIF) as announced in FHA ML 2023-13. Use of the form is effective with FHA loan applications dated on or after 8/28/2023. View Pennymac Announcement 23-51 – FHA Mortgagee Letter 2023-13 SCIF for details.

CBC Mortgage Agency (CBCMA), a Native American wholly owned and federally chartered housing finance agency, has been approved by the U.S. Department of Agriculture to provide 30-year mortgage loans for borrowers outside of urban and suburban areas. Because the USDA loan program offers 100% financing, CBCMA enables correspondent lenders to help low- to moderate-income families in rural areas achieve homeownership. USDA loans provide low- and moderate-income borrowers with “the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas,” according to the agency. Up to 90% of the original principal amount of USDA-based 30-year notes are guaranteed by the agency.

AmeriHome Mortgage Announcement 20230707-CL summarizes previously published changes made during July, additional changes made with this announcement, and recent Agency and regulatory news.

Recently, the GSEs announced updated policies addressing critical repairs, deferred maintenance, and special assessments in projects with five or more attached units effective for loan applications dated on or after September 18, 2023. View AmeriHome Correspondent Product Announcement 20230801-CL for additional information.

PRMG Product Update 23-36 includes clarifications regarding FHA Standard and High Balance cash out transactions on Manufactured Homes, borrowers living rent free requirements on Investor Solution, self-employment verifications requirements of Ruby Jumbo and Express Jumbo. Additional updates and clarifications for Ruby Express and Onyx Jumbo.

Capital Markets

A slide in big tech equities yesterday due to President Biden’s Executive Order announcement prohibiting investment in certain Chinese technologies, as well as higher energy prices, helped mortgage-backed security “sentiment” and further flattened the yield curve, which at this point is to say it increased in inversion: “bear flattening.” Fortunately, MBS prices were not very reactive to the initial selloff in Treasuries which tightened spreads further. Investors squared positions ahead of today’s Consumer Price Index inflation data that will help shape the outlook for the Fed’s next steps.

What was the result of all this noise? The U.S. 10-year note and the 30-year bond prices, along with them MBS, pushed to fresh highs in the afternoon after the completion of the day’s solid $38 billion 10-year note offering while 5-year notes and shorter tenor prices slipped to fresh lows as the market prepared for July CPI. Some movement was driven by European equities rebounding after Italy walked back Tuesday’s windfall tax announcement, saying the tax would be capped at 0.1 percent of assets.

Today brings the CPI report for July, as expected. Headline CPI increased .2 month-over-month and () year-over-year when it was expected to increase 0.2 percent month-over-month and 3.3 percent year-over-year compared with 0.2 percent and 3.0 percent in June. The core reading, ex-food and energy, was .2, as expected, and 4.7 percent year over year versus 4.8 percent previously. Weekly jobless claims have also been released: 248k, higher than expected, 1.684 million continuing claims. Later today brings a Treasury auction of $23 billion 30-year bonds, and remarks from Atlanta Fed President Bostic and Philadelphia Fed President Harker. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 3.96 after closing yesterday at 4.01 percent after the inflation data.

Employment and Transitions

“Attention homebuilders and other potential joint venture partners! In today’s volatile market, a reliable lending partner is non-negotiable. Enter PrimeLending, backed by the strength of Hilltop Holdings and PlainsCapital Bank. We’re not just surviving; we’re thriving. With over 37 years in the mortgage industry, we bring more than stability and experience. We bring game-changing insight to boost your revenue. Join us at PrimeLending Ventures Management, LLC. Our proven track record, streamlined operations, and cutting-edge technology speak for themselves. Imagine this: together, we’re not just about making profits, but about evolving your brand. What are you waiting for? Reach out to Mike Matthews today to talk about a partnership built on shared success.”

Mortgage Capital Trading, Inc. (MCT®), the de facto leader in innovative mortgage capital markets technology, today announced the appointment of Steve Pawlowski as Managing Director, Head of Technology Solutions. Mr. Pawlowski will be responsible for expanding upon MCT’s proven record of driving efficiency and liquidity in the secondary market. “MCT was the fastest and most comprehensive technology partner I worked with on API development while at Fannie Mae,” said Steve Pawlowski, Managing Director, Head of Technology Solutions at MCT. “I couldn’t be more excited to apply my institutional expertise to this agile and committed technology development team.” Mr. Pawlowski will provide leadership on all MCT technology development. He brings extensive industry experience to MCT, including 30+ years with Fannie Mae’s Capital Markets and Single-Family Digital Products and Services organizations. Read the full press release or join MCT’s newsletter to stay up to date on recent news and educational content.

Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

August 13, 2023 by Brett Tams

Broker Pricing and Non-QM Products; Seminars and Conferences; Rates Higher on Producer Prices

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Broker Pricing and Non-QM Products; Seminars and Conferences; Rates Higher on Producer Prices

By:
Rob Chrisman

Fri, Aug 11 2023, 10:22 AM

As the MMLA conference wraps up (congratulations to Dan Grzywacz, CMB, and nearly 40-year industry vet, who was this year’s James T. Barnes Award winner), the conversations still involve some seemingly endless topics. One of which is W2 versus 1099. There’s been a lot of “quacking:” about whether originators can be paid as independent contractors (1099) or need to be employees (W-2). Mortgage Muser and attorney Brian Levy has some new thoughts on this topic that are worthwhile even if he “ducks” providing legal advice in his entertaining and insightful mortgage blog. View past editions of the Mortgage Musings and subscribe to get emailed about new postings for free here. Another is sticky higher interest rates, and today at 3PM ET, Skylar Olsen, Zillow’s Chief Economist, will be co-hosting The Mortgage Collaborative’s Rundown, covering current events in the economy and mortgage market for 30-45 minutes. And there’s volume. According to Curinos, July 2023 funded mortgage volume decreased 30% YoY and 13% MoM. Curinos sources a statistically significant data set directly from lenders to produce these benchmark figures. (Today’s podcast can be found here and is sponsored by SimpleNexus, an nCino Company, developer of mortgage technology uniting the people, systems, and stages of the mortgage process into one seamless, end-to-end solution. Hear an interview with Equifax’s Joel Rickman on leveraging income and employment verifications during the home equity line of credit (HELOC) origination process.)

Lender and Broker Software, Products, and Services

“Brokers can now shop, lock, and deliver on one platform that seamlessly connects brokers, lenders, and originators. In this market, hustle is everything. You can’t afford to waste a single deal… Or a single minute. That’s why ReadyPrice has launched its innovative new Shop, Lock & Deliver loan exchange platform, designed to help independent mortgage brokers like you save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, and all on a single platform, at no cost to brokers. It’s the industry’s most powerful universal delivery portal, and it’s already helping thousands of brokers around the country thrive and compete in even the toughest market environments. Multiple lenders. One platform. Zero b.s. Come check us out today.”

Mega Capital Funding is proud to be a 25 yr. partner to the broker community. The team at Mega Capital continues to grow and expand across the US. Mega has recently added another 10 outside AEs across the country to further support the broker community. The team at Mega is also expanding our products this month with additions to our Non QM suite. ITIN is new and improved along with our Expanded DSCR options which also includes a No Ratio DSCR. We at Mega are looking to continue to be a destination for brokers and bankers to find all their lending needs under one roof. Conv, FHA, VA, USDA, Jumbo and Non QM. Mega Capital is also excited to be at NAMB this year. Please come by and see us in Vegas.

Looking Ahead to Conferences and Training

A good place to start is here, and click on “events.”

The Mississippi Mortgage Bankers Association is holding its fall conference September 7-8 in Jackson. Our theme for this year is “Building a Strong MS” We are focusing on building relationships, strategies, and opportunities for the real estate housing industry in MS. Our fall conference is open to loan originators, realtors, and other industry affiliates. Realtors will receive Continuing ED (CE) credits for attending the Fall Conference.

Save the dates of September 10-12 and join lending professionals from the Pacific Northwest at the Riverhouse in Bend, Oregon, for the Pacific Northwest Lenders Conference. This event promises to be a catalyst for professional growth, offering a unique platform to expand knowledge, build valuable connections, and elevate lending businesses in the region.

Prepare to be amazed and delighted when you swing by the Plaza Home Mortgage® booth at the NAMB National Conference, September 8-11, at Caesars Palace in Las Vegas.

Register for free with the code PLAZAFREE and pop by Plaza’s booth #607 or schedule a meeting with us at [email protected].

Zelman’s Virtual Housing Summit is September 18-21, though not exactly in person.

Network and collaborate with your industry colleagues while learning the latest updates on mortgage industry standards at MISMO’s Fall Summit, September 18 – 21 in Washington, DC

New To MISMO? Check out this 20-minute presentation “Intro to the MISMO Summit Experience” to learn what to expect and how to best prepare so that you get the most out of the Summit.

AzAMP Annual EXPO, Luncheon, and 8-Hour NMLS CE Class, September 27–28, at the We-Ko-Pa Resort and Casino. Begin your experience on Wednesday, Sept. 27 with Part 1 of NMLS CE class. Full day of events begins on Thursday, September 28 including NMLS CE class Part 2, Luncheon with Keynote Speakers Allen Beydoun, UWM Executive Vice President and Rob Chrisman, The Chrisman Commentary Daily Mortgage News, followed by the AzAMP Expo.

Watch on demand, at your leisure: Millennials and Gen Zers represent the largest group of first-time homebuyers. In less than 10 years, 3.1 million will have entered the market. Of these buyers, roughly 75 percent of them report checking social media daily. Making social media a necessary strategy for loan officers. Join Homebot’s VP of Marketing, Ashley Remstad and Mortgage Advisor Sosi Avila as they discuss key strategies and tactics for using social media to your advantage. Register for the webinar here.

It’s time to register for the New England Mortgage Bankers two-day Conference, September 13-14 in Portsmouth NH. Multiple venues all within walking distance for a new NEMBC experience.

Register for the AzAMP Annual EXPO, Luncheon, and 8-Hour NMLS CE Class on September 27th and 28th at the We-Ko-Pa Resort and Casino. Don’t miss Luncheon Speakers Allen Beydoun, UWM EVP, and Rob Chrisman, The Chrisman Commentary Daily Mortgage News. Stay the night at the resort and attend all the events.

Registration for the NCEO 2023 Fall Forum in Houston, September 26-28 is now open. Featuring top industry experts and thought leaders, the forum will update you on the latest trends and best practices in employee ownership. Network with other employee owners and industry professionals from across the country, sharing ideas, challenges, and successes.

Secure early-bird pricing through June 23rd. From close-knit conversations to invigorating keynotes, the forum is the place to rocket your company into the stratosphere.

MBAC 67th Annual Convention Oct 1-4, 2023 at the Francis Marion Hotel, Charleston, SC.

Sponsorship opportunities available, reserve your room at the Francis Marion Hotel use Promo Code MBAC2023 for special rate, Last Day to reserve at this rate, September 11, 2023.

Mark your calendars and make plans for ACUMA’s 2023 Annual Conference! Registration is now open for the biggest event tailored for the credit union mortgage professional. This year’s theme, Make Your Mark, is the largest and most comprehensive event on ACUMA’s education calendar and is scheduled for Oct. 1-4 at the Gaylord National Resort in National Harbor, Maryland, just down the Potomac River from Washington, D.C. Make plans now to attend this year’s largest gathering of mortgage lenders, and plan to continue to Make Your Mark in credit union mortgage lending! Here’s the link to register! ACUMA 2023 Annual Conference.

At Turning Stone Casino & Resort, Verona, NY., October 4th at 12:00 PM – October 6th at 12:00 PM (EDT), NYMBA 2023 Annual Convention & Golf Tournament, a premier event that brings together industry leaders, professionals, and innovators in the mortgage banking sector. This convention serves as a platform to foster collaboration, share knowledge, and explore emerging trends, ultimately shaping the future of the mortgage banking industry in New York and beyond.

As we celebrate America’s independence, we have many other reasons to celebrate as well. This October 15-18, we’re taking the original gathering of real estate finance professionals to the birthplace of our country, and we’re celebrating some of the reasons you’re going to love it: MBA’s Annual Convention & Expo 2023.The largest annual gathering of real estate finance professionals, this is the one event you need to gain access to the industry’s power players and innovators. Be inspired and get informed by engaging speakers on the Main Stage. Meet with dozens of exhibitors in THE HUB and get hands-on access to the latest products and services. Dive deep into Breakout Sessions to get the insight you need on all the facets of the business.

There’s only one venue where you can get timely updates on where the reverse mortgage industry is headed, the 2023 Annual Meeting & Expo, October 23-25 in Nashville, TN.

Get the latest news on the HECM program. Learn about proprietary product opportunities. Find out what other regulatory changes are forthcoming. Pre-sale registration, the lowest registration rate, expires at midnight (Eastern Time) on Tuesday, August 22.

The kind of news you want to know, VIBE 2023, a very important broker exchange, is here! What is VIBE 2023?* The biggest growth mindset event for Mortgage Brokers featuring a VIP lineup of some of the most influential speakers in the country! Join us at the Westin South Coast Plaza in Costa Mesa, CA on 10/24/2023. Register to attend using your UNIQUE CODE**, provided by your Kind Account Executive. Learn more by visiting here. *VIBE 2023 event is open to all licensed Mortgage Brokers in the United States. No commitments to establish a partnership with Kind Lending are required to attend. **Unique Codes are provided by your Kind Lending Account Executive. If you do not have an account executive or are not yet working with Kind TPO, email us to learn more.

TMBA is working through the summer planning outstanding events including the 6th Annual Mortgage Symposium, November 6-7 at the Westin Dallas Southlake Hotel in Southlake TX. The Texas Women Mortgage Bankers event will be held on November 6 at the Westin Dallas Southlake Hotel.

October Research, LLC is happy to bring back the Women’s Leadership Summit (WLS) for its second year. It will be held November 6-7 at the Naples Grande Beach Resort in Naples, FL. We are now accepting registrations and speaker nominations! Built around the four pillars (Develop, Grow, Support and Empower) WLS provides attendees with the tools for success in a fun and supportive environment. Attendees come from across the country to learn from our visiting experts and each other about how to meet their goals. Visit OctoberResearchWLS.com for more information.

Capital Markets

Not only do the earth’s temperatures keep going higher, but inflation does as well, but at a slower pace! It was revealed yesterday that the consumer price index rose a temperate 0.2 percent in July and 3.2 percent year-over-year, matching consensus expectations. That marked the smallest back-to-back gains in more than two years, adding to a steady wave of disinflation in recent months. Excluding the volatile food and energy components, the “core” index rose 4.7 percent year-over-year versus 4.8 percent in June. The index for shelter accounted for 90 percent of the increase, but is almost back to pre-pandemic levels and will continue to moderate after home price appreciation peaked last year.

While the recent trend is encouraging and confirms that inflation is headed in the direction the FOMC wants, it’s likely premature to get overly excited about a sustained return to the Fed’s 2 percent inflation target. The Fed’s fear is that a pause will reignite home price appreciation, exacerbate the affordability problem, and push inflation higher. Look for the Fed to leave interest rates unchanged at the next policy meeting in September, but add the caveat that the job isn’t done yet. Initial claims also moved in a direction last week to corroborate the thinking that there is some softening in the labor market, which is what the Fed expects and hopes to see. However, bond yields rose by the day’s close after the U.S. Treasury closed out this week’s auction slate with a weak $23 billion 30-year bond offering.

Today’s calendar kicked off with MBA reporting that the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 3.37 percent of all loans outstanding at the end of the second quarter of 2023, down 19 basis points from the first quarter of 2023 and down 27 basis points from one year ago. The percentage of loans on which foreclosure actions were started in the second quarter fell by 3 basis points to 0.13 percent.

We’ve also received the July Producer Price Index, which increased .3 percent month-over-month and .8 percent years-over-year versus 0.2 percent month-over-month and 0.6 percent year-over-year expectations and both 0.1 percent month-over-month and year-over-year previously. Core PPI rose (), +2.7 year over year. The only other release scheduled for today is at 10AM ET with the preliminary August Michigan sentiment. We begin the day with Agency MBS prices worse .125-.250 from last night and the 10-year yielding 4.13 after closing yesterday at 4.08 percent.

Employment and Transitions

“Keith McKay, CEO of Prime Choice Funding, invites you to participate in reshaping the mortgage industry. Our mission for 2023 is to become the top mortgage broker in the nation. Join our team and expand your professional horizon with our diverse loan programs, flexible compensation plans, and a unique opportunity to earn extra by offering solar solutions to your clients. Backed by comprehensive marketing resources, cutting-edge platform, and robust operations support, your potential for growth is limitless. With a history dating back to 2007, Prime Choice represents stability and innovation in finance and sustainability. Register for our webinar today and explore these rewarding opportunities.”

The Maryland office of USA Mortgage has added nationally prominent Loan Officer, Sam Rosenblatt, to its roster. Rosenblatt joins William “Bill” Sohan in his venture to expand USA’s national footprint. Active in the mortgage industry since 1995, Rosenblatt was the #1 producer in units in Maryland in 2021, filing 978 closed loans valued at $338,087,603, and is among the top 50 originators in the nation. “I’m excited to join USA Mortgage because they have great loan options for my clients, state-of-the-art marketing, and cutting-edge technology that makes the mortgage process as efficient and smooth as possible”, he said. Founded in St. Louis in 2001, USA has offices in 34 states and is licensed in 49 states plus the District of Columbia. For a confidential conversation about joining USA, contact Brooke Anderson at 609-500-1520.

Switching gears, Michael Dresden, the President of Dart Appraisal, sent the sad news that Tim Laden, Dart’s Chief Appraiser, passed away. “Tim impacted so many appraisers across the country through his love for coaching and mentoring. Tim was such an asset to Dart and helped us elevate many areas of our business. We’re better because of Tim.”

Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

August 13, 2023 by Brett Tams

WEST PALM BEACH, Fla. — Buying a home is costing a lot more these days as mortgage rates have hit a 22-year high.

The rate on a 30-year fixed mortgage, the most common, is now flirting with 7%, and there’s talk it could rise more.

This is potentially threatening to slow down South Florida’s housing market.

“Not only does the house cost more, but the financing of the house costs more,” Bankrate economist Greg McBride said.

SPECIAL COVERAGE: Priced Out of Paradise

Bankrate economist Greg McBride discusses when he thinks mortgage rates might start to decrease.

The rise of rates from 2002, McBride said, has stripped 35% of the buying power for those looking for a home.

“Month over month, year over year new mortgage applications are down,” Ken H. Johnson, an economist at Florida Atlantic University’s College of Business, said. “Refinance applications are down.”

Johnson said high rates not seen in more than 20 years can’t help but put a chill into South Florida home buyers.

“I’ve never seen this phenomenon before where people say, ‘I’m fine where I am because I’m not moving because I don’t want to give up my super great low rate mortgage,” Johnson said.

Ken H. Johnson offers his insight on the current real estate market in South Florida.

Johnson said the high rates also have the potential to keep buyers on the sidelines when trying to navigate inflated home prices and now rates that will only drive up monthly payments.

McBride said much of this is tied to inflation and rate hikes from the Federal Reserve, which is trying to slow rising prices.

“If inflation comes down in a meaningful way, and there’s a prospect of reduced interest rates down the road, that’s the type of impetus that we could see bringing mortgage rates down,” McBride said. “I just don’t expect that on the near-term horizon.”

Adjustable-rate mortgages, not as popular, can offer lower introductory rates. But experts warn that homeowners’ monthly payments could shoot up if rates keep trending up in the near future.

Source: wptv.com

What Is Online Bill Pay?

Using Bill Pay to Organize Your Bills

Setting Up Online Bill Pay

1. Finding a Financial Partner that Offers Bill Pay

2. Determining which Bills to Autopay

3. Gathering Together All Bills

4. Logging on to Personal Finances

5. Inputting Billing Information

6. Taking Note of the Billing Schedule

Keeping Track of Outstanding Bills and Extra Fees

Imposing Late Fees

Accruing Interest Charges

Experiencing Service Disruptions

Declining Credit Rating

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Weighing the Benefits of Bill Pay

The Takeaway

FAQ

Does bill pay take the money out right away?

Does bill pay send a physical check?

What is the difference between bill pay and ACH

Does IRS Collection Go on Your Credit Report?

Does IRS Debt Ever Show up on Your Credit Report?

How Do Taxes Affect Your Credit Score?

You Prioritize Tax Debt Over Other Debt

You Use Revolving Credit to Pay Taxes

You Take Out a Loan to Pay Taxes

It’s Important to Deal With Taxes Promptly

Episode transcript

The best investments

1. High-yield Savings Accounts

2. Short-term Certificates of Deposit (CDs)

3. Government Bonds

4. Corporate Bonds

5. Real Estate and REITs

6. Individual Stocks

7. Index Funds

8. Exchange-traded Funds (ETFs)

9. Alternative Investments

How to Choose the Best Investments

1. Assess Your Risk Tolerance

2. Gauge Your Time Horizon

3. Recognize Your Personal Investment Knowledge

4. Assess How Much You Can Budget for Investing

Best Investments: FAQ

What Is Compound Interest?

Which Investment Gives the Highest Returns?

Is It OK to Invest During Times of Uncertainty?

Should You Invest with Bad Credit?

Expectations for Home Price Growth Are a Bit More Muted Today

Top neighborhoods with luxury home features in Westchester County

1. Three-to-four car garage

2. Large walkout basements

3. New kitchen

Manufactured, HELOC, Automation, Home Insurance Products; Wholesaler Earnings and News; Inflation and Rates

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Broker Pricing and Non-QM Products; Seminars and Conferences; Rates Higher on Producer Prices

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