Rate watchers are eagerly keeping tabs on mortgage interest rates, as they continue to slide. The 30-year fixed-rate fell to 3.07% over the Fourth of July weekend, another milestone low, according to Freddie Mac. But the reality is not everyone will qualify for a mortgage rate that low.
Credit score and down payment are both significant factors in the rate you get, but so is where you live and which lender you choose. A recent report by Haus, a home-financing startup, showed that getting a low rate was not entirely dependent on your credit profile.
“Lenders look at FICO scores to help determine interest rates. Financial prudence is going to be wrapped up in credit score. But where you live and which lender you use is also going to have an impact on your rate,” says Ralph McLaughlin, chief economist at Haus.
The report, which is based on Haus’ analysis of more than 8.5 million mortgage originations between 2012 and 2018 of borrowers with the same down payment, existing debt and credit score, produced two compelling results:
Who you choose as your lender could impact your mortgage rate by three-quarters of a percentage point.
Where you live matters, as there was more than a third of a percentage point difference in rates across metropolitan areas.
Here we’ll look at what those results mean for today’s borrowers and what you can do to improve your chances of getting a low rate as quickly as possible.
How Comparison Shopping Can Save You Money
All things being equal, borrowers who shopped around for a mortgage rate likely got a better deal than those who went with the first lender they found. Among mortgage lenders, there was a 75 basis point (bps) difference between rates, the report shows. A basis point is one one-hundredth of a percentage point. So, as an example, the same borrower would get a 3.25% interest rate with the least expensive lender compared with a 4% interest rate with the most expensive.
Without considering other housing costs (property taxes, homeowners insurance) or down payment, the difference in total interest paid between a 30-year fixed-rate mortgage with a 3.25% rate and a 4% percent rate on a $300,000 home is $46,000. The person with the 3.25% mortgage interest rate also will pay about $122 less each month.
“One of the biggest takeaways from this report was the enormous spread between rates different lenders offer,” McLaughlin says. “If you’re a homebuyer or refinancing your mortgage and you want to get the best rate fast, [the key is] not going to be to improve your credit score, unless you have a bunch of cash to pay down debt. Shopping around is what will help you immediately.”
According to the report, the lenders with the lowest rates were New York Community Bank and Chicago Mortgage Solutions (operating as Interfirst Mortgage Company), coming in 75 bps lower than their costliest counterparts, which were Citizens National Bank and Texas Capital Bank.
5 Least Expensive Mortgage Lenders
New York Community Bank
Chicago Mortgage Solutions
USAA
PHH Mortgage
Provident Funding
5 Most Expensive Mortgage Lenders
Citizens National Bank
Texas Capital Bank
Plaza Home Mortgage
Pacific Union Financial
GMAC Mortgage
Metro Areas with More Banks Offer Lower Rates
Along with shopping around, where you live can affect your interest rate. Borrowers in metropolitan areas with a dense concentration of banks typically received a lower interest rate than their counterparts in areas with fewer banks, according to the Haus report. The difference between the areas with the highest concentration of banks and the lowest was about 35 bps.
Dubuque, Iowa; Springfield, Illinois and Lima, Ohio had the cheapest mortgage rates while Sandusky, Ohio; McAllen, Texas and Danville, Virginia were among the most expensive places for home loans.
“If there’s less competition in an area banks can afford to raise their prices without losing business,” McLaughlin says. “This is especially true if borrowers choose to use local, brick-and-mortar banks rather than online banks, for example.”
Another reason why areas with fewer banks might charge more is that these areas are likely rural or away from urban cores, where home prices are lower, McLaughlin says.
Loan size affects interest rates based on two main factors: mortgage processing costs and risk. Smaller loans offer less exposure to banks, but they can be more costly.
“While smaller loans generally are less risky, the profit from a larger loan will be considerably more, which will cover the mortgage processing costs,” says Joseph J. Zoppi, vice president at New Jersey-based Templar Real Estate Enterprises. “On a smaller loan, this is not possible so the lender will charge a high rate or additional fees to cover the mortgage processing cost.”
For folks in areas where mortgage rates are several basis points higher than the national average, go beyond brick-and-mortar banks. Online lenders are accessible from anywhere and might offer a more competitive rate than what’s available locally.
“Don’t be afraid to use banks you’ve never heard of. So long as the rates are good, the fees reasonable and terms fair, there won’t be any issues,” says Leslie Tayne, founder and head attorney at Tayne Law Group in New York.
How to Shop Around and What to Ask Lenders
The first step in getting a competitive rate is to know what the national average for mortgage rates are. There are different rates for different types of mortgages. The most common mortgage, a 30-year fixed-rate, usually has a higher interest rate than home loans with shorter terms, such as 15-year fixed-rate mortgages.
The national average will give you a target to aim for. Because your credit score and down payment have the most influence on the rate you get, be sure you factor those in when you’re comparison shopping.
“The difference between a good and bad credit score may be reflected in the rates you’re quoted, with less favorable credit scores sometimes resulting in a 1% or more increase to your rate,” says Chris de la Motte, president of Simplist, a digital mortgage marketplace.
Start by contacting financial institutions you already have a relationship with, as you might qualify for certain discounts. Consider including online banks and mortgage brokers in your research as this will give you a broader reach.
Brokers have access to several lenders so they can offer you a variety of options without requiring you to spend a lot of time gathering quotes. However, mortgage brokers charge a fee for their service—typically between 1% and 2% of the loan amount.
Keep in mind, the cost of your loan includes more than just your interest rate. It also includes closing costs, any discount points and loan origination fees. The total cost of your loan is reflected in the APR, or annual percentage rate. The APR will vary by lender, which means two lenders can offer the same interest rate but one might charge higher fees, which raises the cost of your loan.
“It’s possible to negotiate your mortgage rate, but it’s not as simple as trying to bargain for a better rate. You will need to demonstrate that you’re creditworthy of the lower rate. It’s sometimes easier to negotiate some of the lending fees, which can total in the thousands,” Zoppi says.
Bad Credit Credit Cards – Personal Finances News – 30 Essential Money Habits | Fintech Zoom
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What are you doing every day that can help you grow your bank account? If you can’t answer that question, it’s time to develop some new money habits.
Just like with your physical health, your financial health depends on the daily decisions you make every day. While healthy habits such as eating better and exercising keep you fit, certain money habits can keep you financially comfortable and help you establish wealth. Click through for money habits you should be doing on a daily basis if you want to be rich.
Last updated: Feb. 24, 2021
Sponsored by Navy Federal Credit Union.
1. Spend Less Than You Earn
This habit is Personal Finance 101. It’s always going to be true that you’ll never get ahead financially if you always have more money going out than coming in. The great news is there are two ways you can work on this habit: Focus both on growing your income and controlling your spending to live within your means.
2. Keep Looking for New Earning Opportunities
As much as controlling spending is an essential habits, earning more money can be just as important. Look for ways to increase your income.
It could be something small, like babysitting once a week or bigger like selling crafts online.
3. Grow and Invest Your Money
In addition to looking for ways to earn money, financially savvy people also look for ways to grow the money they have. That can be as simple as finding a high-yield savings account where you can stash your funds and earn more than you would with a lower interest savings or checking account.
Woman managing the debt.
4. Continuously Pay Down Debt
Interest and debt can hold you back financially. It’s nearly impossible to get ahead and create a financially secure future when you’re always paying off yesterday’s purchases.
If you’re dealing with high-interest credit card debt, you can tackle it faster by taking advantage of a lower interest rate. For example, Navy Federal Credit Union’s Platinum card offers 0% APR on balance transfers for 12 months. By transferring your high-interest credit card debt to this card, you can potentially save hundreds or more on interest.
And if you also have a plan to pay off the card completely within a year, you’ll be saving so much more on top.
*Information on promotions is accurate as of Feb. 3, 2021. Additional requirements may apply. Offers and terms are subject to change.
5. Pay Yourself First
When people say “pay yourself first,” they mean you should take your savings out of your paycheck as soon as it hits your checking account to make sure you save something before you spend it all on bills and other expenses. The key to saving successfully is to save first, save a lot — 10% to 20% is often recommended — and save often.
6. Maintain an Emergency Fund
Virtually every personal finance expert agrees that an emergency fund is central to financial health. Building and maintaining an emergency fund can help you avoid debt and give you a reserve to draw from, which can also help you keep your financial goals on track even through life’s setbacks.
Start small by saving at least one month’s worth of expenses, and then work your way up to saving a larger emergency fund, such as a year’s worth. Having several months’ worth of expenses saved up can protect you against financial concerns when crises like a job loss or medical emergency come up.
Related: Here’s How Much You Should Have in Your Emergency Fund
7. Set Financial Goals
To know what daily money habits to focus on and prioritize your money management the right way, you have to know what you’re trying to accomplish. Review your finances. Look specifically for the biggest drains on your money, such as overdraft fees or high-interest debt, and also spend some time thinking about what you’d like your finances to look like in the future. Then, identify specific steps required to achieve your short- and long-term money goals.
8. Budget For Extra Expenses
In addition to basic living expenses and bills, you should also budget for other purchases you’re in the habit of making. Whether it’s buying a coffee twice a week, eating out on the weekends or buying gifts for friends and family, these seemingly little expenses can add up and suck your budget dry if you don’t plan for them.
Write down everything you’ve spent money on in the past month — go back further if you can remember or look up transaction records and receipts — and categorize each expense. Rank each category by how important it is to you. Add the top three priorities as line items in your budget, such as $100 a month for date nights or $20 a month to buy supplies for your hobby. For everything else, work on dropping those spending habits or finding cheaper alternatives like brewing your coffee at home.
DOGS, dog, pet insurance
9. Save For the Unexpected
Extra costs can come up frequently, and whether or not they’re true emergencies, they can still set you back. Maybe your tooth filling falls out, your pet decides to eat half a rug and needs emergency medical care, you get a flat tire or your kid wants to start playing a sport. Your finances will get hit twice as hard by these unexpected expenses if you don’t have extra money saved to cover them.
Having a buffer fund can create a little bit of wiggle room in your accounts so you can pay for these costs without going into debt or pulling money from your emergency fund. Try socking away $1,000 for each member of your household, for example, including pets.
10. Get and Stay Insured
In addition to a buffer fund, you should also consider insurance. Insurance is an important protection that can stand between you and bankruptcy due to a major emergency. Make sure you have the following types of insurance, if they apply to you:
Stay current on all policies so coverage will never lapse when you and your family need it most.
couple working on finances
11. Review Your Progress Regularly
Set aside time each week to check on your financial goals. Did you make progress? Were there any setbacks? Track how you’re doing and celebrate your wins — not by splurging, though — to keep yourself motivated and on course.
12. Track Your Money
You can’t put your money where it matters if you don’t know where it’s going. Figure out a system to keep track of your financial transactions. Whether you prefer using pen and paper to reconcile your bank accounts the old-fashioned way or the personal finance apps like Mint, you need to have a clear picture of what is happening with your money. Tracking your spending can help you quickly identify problem areas that you can improve on and see the progress you’re making.
Prepay Your Property Tax Bill
13. Check Financial Accounts Often
As part of keeping track of your money, you should check on all financial accounts on a regular basis. You should review spending accounts, like credit cards and checking accounts, daily in terms of checking balances and tracking expenses. Review bills when making monthly payments and updating your budget to make sure you avoid overdrafts or late fees.
Savings accounts should get a once-over weekly or monthly to keep them on track. Retirement accounts and investments can be reviewed less frequently, such as monthly, quarterly or biannually.
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14. Carry Only the Money or Cards You Need
If your wallet is so full that you can hardly close it, consider limiting what you choose to carry to the bare necessities: one debit card, enough cash to cover a meal or ride home, and one form of identification — but not your Social Security card. You can’t spend money you don’t have with you, so leave credit cards and extra cash at home to resist the temptation to spend.
Leaving credit cards at home can also limit your vulnerability to identity theft should your wallet ever be lost or stolen. Plus, charging all purchases to the same debit card and linked account will make it simpler to track your spending.
15. Pay Bills on Time
Not only will paying bills on time save you money on late fees and penalties, but it is also key to financial peace and health.
If making payments on time is a struggle for you, review each bill you pay on a monthly basis and write down the due date. Set reminders on your calendar, alerts on your phone or sign up for reminder emails if they’re offered so you never miss a payment.
16. Automate Your Money
Another way to avoid late payments is to automate your transactions. For payments, set up automatic transfers through your bank’s online bill pay service to send money out to pay bills at least three days ahead of the due dates.
Automation is also great for the “paying yourself first” habit. If you have a retirement account through work, set up automatic contributions. If you get regular paychecks in fixed amounts, set up automatic transfers to move money from your checking account to a savings account or retirement fund right after payday. Monitor these automatic transfers so that you never overdraft an account.
Pregnant businesswoman on coffee break making online credit card purchase.
17. Make Smart Moves To Tackle Your Debt
High-interest debt like credit cards can be extremely difficult to pay off. In order to tackle this debt sooner and more easily, consider your options.
By transferring your high-interest credit card debt to a card that offers a helpful balance transfer option, like Navy Federal’s Platinum card, you can make your money go further. The card’s offer of 0% intro APR on balance transfers for 12 months also doesn’t come with balance transfer fees, which is a perk you don’t see everywhere. It also doesn’t have any annual fees or foreign transaction fees. And with 24/7 stateside member service representatives that understand the needs of the military community, you can set yourself up for a successful future this way. Navy Federal membership is open to active duty military, veterans and families.
*Information on promotions is accurate as of Feb. 3, 2021. Additional requirements may apply. Offers and terms are subject to change.
Overhead Business Angles woman at office desk with supply.
18. Do It Yourself
Convenience is attractive, but it also can be expensive. Some services are worth paying for so that you can free up your time — or avoid incurring more costs by botching the job — but you can save yourself potentially thousands by getting in the habit of tackling many projects yourself. Simple things like preparing meals at home or buying a manicure kit to maintain your own nails can add up to big savings.
19. Build Your Credit
It can be easy to get complacent about your credit score and forget to pay attention to your credit report — until you try to get a home loan or turn in a rental application and are reminded of how important they are.
Check your credit reports yearly, and get any issues resolved if there are errors on them. Make sure you’re managing your credit well by paying off bills on time and keeping balances low. These money habits can help you avoid high-interest costs as well as build your credit.
20. Invest In Yourself
The best place you can put your money is into improving your value and net worth. From daily habits like eating well and getting enough sleep to big life steps like finishing school or switching careers, you should adopt the mindset of always growing and achieving goals that have long-term benefits.
21. Save For Retirement
Saving early and frequently is one of the secrets to retiring with financial security. Don’t put today’s wants ahead of tomorrow’s needs. Set up a retirement account and start adding to it each month.
Figure out how much you need to save before you retire and make a concrete plan to do it. Learn more about financial planning and investing to grow your money and keep up with inflation.
22. Get Your 401(k) Employer Match
Along with saving for retirement, put money toward employer-sponsored retirement accounts, especially if your employer will match your contributions. Employer contributions are free money — all you have to do is set a little cash aside for retirement, which is what you should be doing anyway.
23. Learn To Want (and Buy) Less
Resist the urge to buy this product and pay for that service to be happy, attractive, fun or anything else that marketing campaigns are designed to make you think. Practice mindfulness through diligent budgeting and possibly through habits that can help you improve how you feel, such as meditation and gratitude journaling, so that you remember to appreciate what you have. Make sure you’re the one deciding what your money should be spent on, not marketers or your peers.
24. Shop With a Plan
Shopping mindlessly leads to overspending and indulging in impulse buys. Planning ahead, especially when grocery shopping, can help you stick to buying what you actually need and avoid wasting money. Make a shopping list, stick to it, and try to get in and out of the store as fast as possible.
25. Compare Costs on Everything
To spend money wisely, you need to be able to decide if what you are getting is a good enough value to justify the cost. Get in the habit of comparing prices of products as well as comparing prices against their value to you. Some personal finance experts suggest you start by comparing your hourly wage to the cost of the item you want to buy.
For example, is that pair of shoes really worth three hours of pay? Then compare the cost of the thing you want to other things you could use the money for, such as paying off high-interest debt.
Lastly, compare the actual item to others like it. Is there a less-expensive alternative that offers the same product or service at a lower cost? If you spend a little more, can you get a better version that would last twice as long? Weighing these options can help you buy less junk, cut down on waste and lead you to choices that offer real value and higher quality.
26. Use Coupons and Ask For Discounts
Look for coupons, deals and discounts. Whenever you make plans to spend, whether it’s heading out to the bar with friends or signing up for a new internet service, check for deals and look for ways to spend less. Maybe the bar has a happy hour and you can save money by getting together earlier. The cable and internet company could be offering a special deal for new customers. Even your credit card issuer might give you a rate discount if you ask.
Only look for deals once you’ve already decided your purchase is a smart one. Don’t use discounts and coupons to justify frivolous spending.
Worried and exhausted male talking on phone at balcony.
27. Learn From Financial Setbacks
Almost as important as knowing the right things to do is knowing how to get back on track when things go wrong. Almost everyone faces financial setbacks at some point.
Practicing the habit of facing setbacks head-on. Look back on past financial missteps so that you can identify what went wrong and how you can prevent those problems in the future.
28. Fix Bad Habits
As you set and practice new, financially healthy habits, you can’t let yourself off the hook for those few bad habits that will inevitably stick around.
Maybe you avoid problems when they come up instead of quickly resolving them or you too easily justify overspending when you’re out with friends. Chances are you have a handful of money habits that are tripping you up again and again, and these bad habits can potentially do more damage than good habits can fix.
Whatever the issue, don’t let yourself sabotage your efforts to build wealth. Along with building positive habits, work to get past your financial weaknesses and be honest with yourself if you’re spending to fulfill an emotional desire instead of meeting a true need.
29. Educate Yourself on Finances
If you’re serious about building financial health and wealth, then you need to educate yourself. After all, you can’t make the best financial choices if you have no idea what your options are and how each decision will impact your life and money down the road. Start small by reading some personal finance books and spending a few minutes each day reading personal finance articles (just like you are right now).
When researching options to make a decision, dive deep into the pros and cons of your choices. Whether you’re shopping for a car loan or the right mortgage or are trying to find the right financial planner or investment vehicles, you’ll be able to make decisions wisely and confidently when you have learned as much as you can about the topic.
Customer paying for their order with a credit card in a cafe.
30. Take Advantage of Cash Back
If you have a credit card that offers cash back on everyday purchases, why not use it to put more money in your back account? Get in the habit of using your card whenever there’s a cash-back opportunity. Just be careful not to spend more than you can afford to pay back.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 30 Essential Money Habits
Bad Credit Credit Cards – Personal Finances News – 30 Essential Money Habits | Fintech Zoom
HER STORY: I read a quote the other day that said “your story is part of your brand. If they don’t know you, they don’t care about your products.” I share a lot about my life on my social media but it’s only what I want you all to see. The thing is, there is so much more you don’t know. So here’s my story…
I was born in Sacramento, CA, and grew up in Oak Park. Home to local gangs, violence, and drugs. I was raised by a single mom of three (the new norm) and I had a great childhood. She never made life look hard. My older brother and sister were very different than me. I was shy, quiet, a book warm, loved to draw, kindhearted, sensitive, giving, patient, and stayed in the house for the most part. My brother didn’t like me to be out in the streets. Everyone would say I don’t have street smarts…they were right.
Fast forward a bit, I attended Sacramento High School and had the option of graduating early. It was a year earlier than planned but I knew what I wanted to be, a fashion designer. I applied to the Fashion Institute of Design and Merchandising in San Francisco and was accepted. I got into the school of my dreams but ended up not going because I didn’t qualify for financial aid, and though my mom offered to sell the house so we could afford it, I declined. I graduated in May of 2005 and made the decision to take a year off of school and then attend Sacramento Community College.
After a year of being in college, getting all A’s and crushing it, my nephews were in a car accident. Their father was in a coma for months, my sister quit her job to be by his side only to find out he had another baby on the way. When he woke up, she packed everything and moved to Georgia. A few months went by, and she returned for Thanksgiving. Taking care of two kids on your own isn’t easy and I could tell she needed help so I offered to take in one of the boys until she was back on her feet. She kept asking me how I would make it work and i said, “I’ll figure it out”. Long story short, I became a full-time aunt at 18.
Going from living your life as a carefree college student with minimum bills to a full-time mom of a 1-year-old with no experience or time to prep was hard. I was financially okay for a little while but bills just started adding up. I started using credit cards which would then go in collections, and I couldn’t afford a babysitter so that I could go to school so I changed my classes to be online. Well, I still needed time to study and actually do my work but I couldn’t find/afford a sitter for that either. Needless to say, I dropped out. It was hard because I felt like I had failed. I felt like I was failing him. He became my new purpose, every decision and step I made would affect him and all i wanted to do was provide the best life for him. Soon the time came for me to let him go back to his mom, my sister, and it crushed every fiber in my body. I felt lost and I felt empty. I never wanted kids until I had him. He changed my entire life.
It took time to heal and get back into the groove of things. I ended up moving to Los Angeles on a hope, a dream, $500 in my pocket, no car, bad credit and no plan. I literally had to figure it out, and fast.
Within two weeks I landed a job in the fashion industry where I participated in fashion shows, learned so much about the business, and helped in LA Fashion Week. I did it all and learned that this was not the field I wanted to be in. I wasn’t happy at all. I would work all day and then come home and paint my pain. It wasn’t until 64 paintings later that I decided to pack my stuff and move back home to Sacramento.
Again, I moved with $300 in my pocket, no car, bad credit, no plans and this time I had one dream, to have an art show. With $300 to my name and no idea how to plan an art show, I made it happen. Within one month of being home, I found a temporary job at a real estate firm and planned a successful art show making $2,400. Life felt good again.
Six years ago I had nothing and was mentally at what I thought was my lowest point. As of today I now have more than $200 to my name, great credit, my own car, I’m a permanent employee at my “temporary” job, have my own art business, I am founder of the charity Give Back Sac, and I am a homeowner. It took awhile to get to this point but it hasn’t been easy, for most it never is, but I’ve always lived by the saying, I’ll figure it out, and that’s exactly what I continue to do every day, take it day by day and figure it out along the way.
Thank you for taking the time to learn about me and my life. Though there is so much more I could tell you, I hope this gives you a little more insight as to who I am.
Keep in touch with Pastel Rae: https://www.pastelrae.com/ IG: @PASTELRAE
Bad Credit Credit Cards – Ferrari News – Clarksburg, City Council, proposed budget $30.0 million, includes additional police and fire staff | Fintech Zoom | Fintech Zoom
Bad Credit Credit Cards – Ferrari News – Clarksburg, City Council, proposed budget $30.0 million, includes additional police and fire staff | Fintech Zoom
Ferrari News – Clarksburg, City Council, proposed budget $30.0 million, includes additional police and fire staff
Councilman Frank Ferrari suggested recognizing employees who have 20 or more years of service with the city. “To recognize them, I’m proposing …
Ferrari News – Clarksburg, City Council, proposed budget $30.0 million, includes additional police and fire staff
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Bad Credit Credit Cards – Ferrari News – Clarksburg, City Council, proposed budget $30.0 million, includes additional police and fire staff | Fintech Zoom