Current Mortgage Rates Continue to Move Lower

It’s been good news this week for home buyers and home owners looking to refinance as mortgage rates have improved. It hasn’t been a big swing lower but mortgage rates have mostly remained lower after a drop on Monday morning. Read on for more details.

Where are mortgage rates going?                                             

Mortgage rates move lower in the Freddie Mac PMMS

Current mortgage rates have moved lower for second straight week, according to the Freddie Mac Primary Mortgage Market Survey (PMMS).

Here are the numbers:

  • The average rate on a 30-year fixed rate mortgage moved lower by two basis points to 4.51% (0.5 points)
  • The average rate on a 15-year fixed rate mortgage ticked lower by three basis points to 3.98% (0.5 points)
  • The average rate on a 5-year adjustable rate mortgage fell by five basis points to 3.82% (0.03 points)

Here is what Freddie Mac’s Economic & Housing Research Group had to say about rates this week:

“Mortgage rates inched backward this week to their lowest level since mid-April.

Backed by very strong consumer spending, the economy is red-hot this month, which is in turn rippling through the financial markets and driving equities higher.

Unfortunately, the same cannot be said about the housing market, where it appears sales activity crested in late 2017. Existing-home sales have now stepped back annually for the fifth straight month, and purchase mortgage applications this week were barely above year ago levels.

It is clear affordability constraints have cooled the housing market, especially in expensive coastal markets. Many metro areas desperately need more new and existing affordable inventory to break out of this slump.”

Rate/Float Recommendation                                  

Lock now before move even higher     

While mortgage rates have improved for the second consecutive week, the long-term outlook continues to be for them to gradually increase as the Federal Reserve gets ready for and follows through with increases to the nation’s benchmark interest rate. The first hike is expected to take place next month, with another likely in December.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:           

Jobless Claims

Applications filed for U.S. unemployment benefits for the week of 8/18 came in at 210,000. That’s 2,000 lower than the previous reading, bringing the 4-week moving average down to 213,750.

FHFA House Price Index

The FHFA House Price Index increased 0.2% from the previous month in June. That brings the year over year increase to 6.5%.

PMI Composite Flash

The PMI Composite index hit a 55.0 in August. Manufacturing came in at 54.5 while Services hit 55.2.

New Home Sales

New Home Sales for July came in at an annualized rate of 627,000. That’s slightly below the consensus reading of 649,000.

Jackson Hole Symposium

Kicks off today and ends tomorrow.

Kansas City Fed Mfg Index 

11:00am

Notable events this week:     

Monday:   

Tuesday:   

Wednesday:         

  • Existing Home Sales
  • EIA Petroleum Status Report
  • FOMC Minutes

Thursday:     

  • Jobless Claims
  • FHFA House Price Index
  • PMI Composite Flash
  • New Home Sales
  • Jackson Hole Symposium
  • Kansas City Fed Mfg Index

Friday:          

  • Fedspeak
  • Jackson Hole Symposium

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Refinance soon to avoid the FHFA adverse market refinance fee

FHFA fee starts on December 1, but rates will go up before that

Starting on December 1, a new “Adverse Market Refinance Fee” will be imposed on most conventional refinances.

But homeowners won’t pay the new fee at closing.

Instead, lenders will cover it by raising refinance rates — likely by as much as 0.125% to 0.25% on average.

To avoid higher rates, you’ll want to refinance before the fee takes effect.

But there’s a catch: to avoid FHFA’s fee, your refinance loan needs to be closed and delivered to Fannie Mae or Freddie Mac before December 1.

Homeowners who want the lowest-possible refinance rate should apply 2-3 months before December 1 — which is pretty much right now.

Find and a low refinance rate now (Feb 9th, 2021)

What is the Adverse Market Refinance Fee?

On August 12, Fannie Mae and Freddie Mac announced they would assess a new fee on all conventional refinance loans.

The fee is equal to 0.5% of the loan amount.

That means if you had a $200,000 refinance, the new fee would amount to an additional cost of $1,000.

Refinances take a long time to close and deliver, so a September 1 start date meant the fee was already being added to refinances in process.

Originally, the fee was meant to start on September first — meaning it would have applied to all loans not yet delivered to Fannie or Freddie by that date.

But because refinances take a long time to close and deliver, the fee effectively started being added to loans that were already in process prior to September 1.

However, Fannie and Freddie have since changed the rules (and delayed the start date for the fee) in response to a strong industry backlash against it.

Changes to the FHFA refinance fee

On August 25th, FHFA announced two changes to the new refinance fee.

  • The start date moved from September 1 to December 1
  • The new charge will not apply to loan amounts below $125,000, or to HomeReady and Home Possible loans

This is good news for borrowers. It means rates may stay a little lower, a little longer.

It also means that borrowers who were already in the process of refinancing might not see their rates go up as a result of the fee.

In fact, loans currently in the pipeline might have their loan costs re-adjusted in borrowers’ favor, notes Matthew Graham of Mortgage News Daily.

But each lender will handle its own loans differently, so make sure you talk to your mortgage company if you were in the process of refinancing.

Also, note that loans must be delivered to Fannie or Freddie before December 1 to avoid the fee.

That means the refinance will have to close much earlier (in October or early November), so time your refinance accordingly.

Find and lock a low refinance rate (Feb 9th, 2021)

The new fee could push refinance rates up by 0.125% or more

When the new fee does go into effect, borrowers won’t pay it directly.

Instead, it’s likely to be charged to borrowers in the form of higher rates.

“The fee is 50bps [0.50%] in terms of PRICE, and that equates to roughly 0.125% in terms of interest rate,” says Graham.

Though others have estimated that refinance rates could rise as much as 0.375% on average when the fee goes into effect.

Either way, that’s a significant difference in refinance rates for borrowers.

For those who planned to refinance in the near future, it makes sense to get the ball rolling as soon as possible.

The earlier you start your refinance, the better your odds of closing and having the loan delivered to Fannie Mae or Freddie Mac before the fee once again goes into effect.

Find a low refinance rate today (Feb 9th, 2021)

Will all refinances be affected by the new fee?

The Adverse Market Refinance Fee will only apply to refinance loans sold to Fannie Mae and Freddie Mac.

In other words, it applies to ‘conventional’ refinance loans.

But other types of mortgages could be affected indirectly.

In fact, the initial announcement set off higher rates for both purchase and refinancing loans, including some not intended for sale to Fannie Mae and Freddie Mac.

Those who had not locked in rates suddenly faced higher interest costs.

So in the coming months, it seems safe to assume that conventional refinances won’t be the only type affected by rising rates.

No refinance fee on loans under $125,000

One piece of good news from Fannie and Freddie’s most recent announcement is that the refinance fee won’t be charged on loans under $125,000.

Note, that’s based on the loan balance — not the home’s value.

So if your home is worth significantly more than $125,000, but you’ve paid down a lot of the balance, you might end up refinancing less than $125K and the fee won’t affect you.

In addition, the fee won’t be charged to those refinancing a Freddie Mac Home Possible loan or Fannie Mae HomeReady loan.

Why was a new fee developed?

We have faced the COVID-19 economy for months. Some 55 million people have filed for unemployment, and lenders have had to adjust many of their policies to account for the added uncertainty.

But did something new happen to justify this extra fee?

According to Freddie Mac, the new fee was necessary “as a result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty.”

Fannie Mae explained that it was adding the fee “in light of market and economic uncertainty resulting in higher risk and costs.”

But on August 25th, a different answer emerged.

According to the Federal Housing Finance Agency (FHFA) — the regulator that runs Fannie Mae and Freddie Mac — the new money was “necessary to cover projected COVID-19 losses of at least $6 billion at the Enterprises.”

“Specifically,” says FHFA, “the actions taken by the Enterprises during the pandemic to protect renters and borrowers are conservatively projected to cost the Enterprises at least $6 billion and could be higher depending on the path of the economic recovery.”

This refers to relief packages passed during COVID-19, which allowed borrowers to skip mortgage payments without penalty and prevented lenders from foreclosing on any delinquent loans.

But this amount is a fraction of the $109.5 billion in profits Fannie and Freddie have added to government coffers, even after paying back bailout funds they received during the 2008 housing crisis, according to ProPublica.

Using a small percentage of past years’ profits to help homeowners through a worldwide pandemic seems like a good idea to us, anyway.

Will Congress stop the new fee before it goes into effect?

The Adverse Market Refinance fee is now set to start after the November election.

So, could the results of the election impact whether or not the fee actually goes into effect?

That’s not certain. Both Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Wm. Lacy Clay (D-MO), Chair of the Subcommittee on Housing, Community Development and Insurance, oppose the new charge.

If opposition to the fee is strong enough, there could potentially be an investigation into the fee and an attempt to stop it. But there’s no guarantee this will happen.

What to do if you want to refinance

Rates are still sitting near record lows — below 3% in many cases. This is basically unheard of in the mortgage world.

Rates are likely to go up as the new refinance fee start date nears. But that’s just one of the many, many factors that can impact mortgage and refinance rates.

If the economy starts to see a real recovery any time soon, rates could start going up regardless of what happens with the refinance fee. On the flip side, they’re not likely to go much lower than they are now.

So for borrowers hoping to refinance at record-low rates, it makes sense to get started sooner rather than later.

Verify your new rate (Feb 9th, 2021)

Source: themortgagereports.com

Mortgage Rates Roughly Unchanged From Last Week

Mortgage rates have been extremely stable given their proximity to all-time lows.  Past precedent suggests one of two things when rates set records: a slow grind lower with additional periodic records or a rather abrupt bounce back in the other direction.

The 2nd half of 2020 was definitely characterized by the aforementioned slow grind with at least 20 separate days resulting in record low rates by December 21st.  Since then, rates have gone no lower, but apart from a brief stint in early January, they really haven’t gone appreciably higher either.  This is made all the more impressive by the fact that the broader bond market is indeed telling mortgage rates to rise.  Specifically, 10yr Treasury yields–a perennial travel companion for 30yr fixed mortgage rates–have been rising consistently since August 2020.  

Mortgage rates were largely immune to that Treasury trend due to volatility at the beginning of the pandemic.  Mortgage rates simply weren’t able to drop as quickly as Treasury yields and have been closing the gap ever since.  The cushion is increasingly thin these days, but not so thin as to prevent the mortgage market from faring better in the face of bond market weakness (bond weakness = higher rates, all other things being equal). 

The other key factor in play is that the price of mortgage-backed bonds (the stuff that actually dictates mortgage rates) have simply outperformed Treasuries as the latter suffer more directly from increased Treasury issuance (used to pay for stimulus and other government spending).  

When will this change?  To a large degree, the change has already begun.  Mortgages may not be as volatile as Treasuries but they are correlating more reliably in terms of the direction of movement on any given day.  With that in mind, tomorrow’s 10yr Treasury auction may be the next source of guidance for both sides of the market.

Source: mortgagenewsdaily.com

Rates Under Pressure Despite Weak Jobs Report

Economic data is traditionally one of the key contributors to interest rate movement. Of the regularly-scheduled reports, none has more market-moving street cred than The Employment Situation–otherwise known as “the jobs report” or simply NFP (due to its headline component: Non-Farm Payrolls).

The relationship between econ data and rates can wax and wane.  Covid definitely threw a wrench in the works, and economists still don’t know exactly how things will shake out.  In general, the market is trading on the assumption that things continue to improve even if the data isn’t making that case today.

In fact, today’s jobs report specifically suggests something quite different.  The economy only created 49k new jobs in January, and the last few reports were revised much lower to boot.  Taken together, these reports effectively put an end to the “correction” phase of the labor market recovery.

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In other words, payrolls plummeted at the onset of covid (“contraction” phase).  They’d been bouncing back in record fashion through September, but have since returned to closer to zero growth.  That’s not great news considering we’re still roughly 10 million jobs away from pre-covid levels.

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Based solely on the data above, interest rates shouldn’t be eager to rise.  A 10 million job deficit is a big deal and it speaks to a level of economic activity that promotes risk-aversion (which, in turn, benefits rates).

But rates have other factors on their mind.  In fact, we don’t even need to move on to other factors to consider one counterpoint.  Simply put, the labor market recovery is still playing out.  While it’s true we’ve seen the big contraction and correction, there’s a lot of uncertainty surrounding the coming months. It’s too soon to declare the death of the labor market based on the past few months–especially when seasonal adjustments are considered.

The following chart zooms in on the monthly job count to show the recent volatility and the normal range for solid job growth.  One could easily imagine returning to that range as lockdown restrictions are eased and vaccine distribution improves.  To a large extent, the bond market (and thus, interest rates) is operating based on its best guesses about the next 6-12 months as opposed to what it mostly already knew about January 2020.  Bottom line: if job growth is going to end up in that “solid range,” we wouldn’t necessarily know it yet.

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Moving on from jobs data, the bond market has other timely concerns.  Next week brings another round of record-setting Treasury issuance.  Treasuries = US government debt.  The more money the government needs to spend (and the less revenue it takes in), the more Treasuries it must issue.  The greater the issuance, the more upward pressure on rates–all other things being equal.  

At the same time, congress passed a budget resolution that paves the way for the $1.9 trillion covid relief bill to pass in as little as 2 weeks.  Stimulus hurts bonds/rates on two fronts by increasing Treasury issuance and by (hopefully) strengthening the economy.  A stronger economy can sustain higher interest rates, in general.  

With all of the above in mind, it’s no great surprise to see a continuation of a well-established trend toward higher yields in 10yr US Treasuries.  The 10yr yield is the benchmark for longer-term rates in the US and it tends to correlate extremely well with mortgages.  As such, this chart would normally be a concern for the mortgage market.

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But as we discussed last week, mortgage rates have diverged from Treasury trends in an unprecedented way.  

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Despite the departure, the point of last week’s newsletter was to provide another reminder that mortgage rates can’t keep this up forever.  Indeed, when we zoom in on the actual day-to-day changes in 10yr yields and mortgage rates, we can see strong correlation again–just with much smaller steps taken by mortgages.

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The takeaway is that it’s no longer safe to bank on a series of increasingly lower all-time lows in mortgage rates.  As long as the broader bond market remains under pressure, so too will the mortgage market–even if it takes less damage by comparison.  If these trends continue, mortgage rates may not rise as fast as Treasuries, but they’d still be rising.

For now though, the sun is still shining on the mortgage market.  Both purchase and refi applications are soaring, and new housing inventory can’t come fast enough.

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Next week’s focal point for interest rates will be the Treasury auctions in the middle of the week–especially the 10yr Note Auction on Wednesday.  Last time around, that auction marked a turning point for a rising rate trend that shared several similarities with the current one.  

Source: mortgagenewsdaily.com

Mortgage applications dip as rates climb

The seesaw nature of mortgage applications continued for the week ending Feb. 5, as applications decreased 4.1% from the prior week, according to the latest data from the Mortgage Bankers Association.

Applications were up 8.5% the week ending Jan. 29 – breaking a two-week stretch of decreases – before falling again last week.

Mortgage rates have increased in four of the six weeks of 2021, according to Joel Kan, MBA’s associate vice president of economic and industry forecasting, which could be causing the dip in applications.

“Jumbo rates [were] the only loan type that saw a decline last week,” Kan said. “Despite some weekly volatility, Treasury rates have been driven higher by expectations of faster economic growth as the COVID-19 vaccine rollout continues.”

The refinance index decreased 4% from the previous week but was still 46% higher year-over-year. The seasonally adjusted purchase index also decreased from one week earlier – down 5% – though the unadjusted purchase Index increased 2% compared with the prior week and was 17% higher than the same week in 2020.

The 30-year fixed mortgage rate increased to 2.96% – a high not seen since November 2020, Kan said. This has led to an uptick in refinancing, he said, as borrowers race to lock in a rate below 3%.

“Government refinance applications did buck the trend and increase, and overall activity was still 46% higher than a year ago,” he said. “Demand for refinances is still very strong this winter. Homebuyers are still very active.”

The higher-priced segment of the market continues to perform well, Kan said, with the average purchase loan sizes increasing to a survey-high of $402,200.

The FHA share of total mortgage applications increased to 9.5% from 9.1% the week prior. The VA share of total mortgage applications increased to 13.3% from 12.1% the week prior.

Here is a more detailed breakdown of this week’s mortgage application data:

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 2.96% from 2.92%
  • The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.11% from 3.12% – the third week in a row of decreases
  • The average contract interest rate for 30-year fixed-rate mortgages increased to 2.97% from 2.94%
  • The average contract interest rate for 15-year fixed-rate mortgages increased to 2.50% from 2.44%
  • The average contract interest rate for 5/1 ARMs increased to 2.92% from 2.88%

Source: housingwire.com

Mortgage rates spike to highest levels in nearly two months – The Washington Post

Freddie Mac, the federally chartered mortgage investor, aggregates rates from about 80 lenders nationwide to come up with weekly national average mortgage rates. It uses rates for high-quality borrowers with strong credit scores and large down payments. These rates are not available to every borrower.

Because the survey is based on home purchase mortgages, rates for refinances may be different. This is especially true because the price adjustment for refinance transactions took effect in December. The adjustment is 0.5 percent of the loan amount (e.g., it is $1,500 on a $300,000 loan) and applies to all Fannie Mae and Freddie Mac refinances.

The 15-year fixed-rate average also moved higher, to 2.23 percent with an average 0.7 point. It was 2.16 percent a week ago and 3.09 percent a year ago. The five-year adjustable rate average grew to 3.12 percent with an average 0.4 point. It was 2.75 percent a week ago and 3.39 percent a year ago.

“Mortgage rates headed higher this week, continuing the strong upward trend that followed last week’s election results” in the Georgia Senate race, said Matthew Speakman, a Zillow economist. “The upward movements over the past couple weeks were a long-awaited deviation from the glacial, downward trend that rates have followed for the past few months. Rates have risen in the past week at their fastest pace since the spring and recently touched their highest level since mid-November.”

Until it fell back Wednesday, the 10-year Treasury yield had been on a steady climb as fears of rising inflation pushed long-term bond yields higher. By Tuesday, the yield had reached 1.15 percent, the highest it has been since March. But then it retreated to 1.1 percent on Wednesday on weakened inflation concerns. Mortgage rates typically follow the same path as the 10-year Treasury yield but have done so less lately.

“After several days of the sharpest increases in rates in months, Treasury and MBS markets should calm,” said Dick Lepre, senior loan officer at RPM Mortgage. “One-party control of D.C. triggered belief that fiscal stimulus would increase and lead to inflation. Once we have a new occupant in the White House, the discussion is likely to turn to tax increases to address the deficit. Markets will then ponder the effects of those and volatility will increase as uncertainty increases. The next six months will be trying.”

Bankrate.com, which puts out a weekly mortgage rate trend index, found that nearly half the experts it surveyed predicted rates will rise in the coming week. More than a third expected them to fall. Elizabeth Rose, sales manager at AmCap Mortgage in Dallas, anticipates rates will move higher.

“Inflation concerns and added supply are weighing heavily on the bond market, setting the stage for higher rates,” she said. “Inflation is the enemy of mortgage bonds and added supply doesn’t help matters any.”

Meanwhile, the dip in mortgage rates to start the year caused applications to soar last week to their highest level in 10 months. According to the latest data from the Mortgage Bankers Association, the market composite index — a measure of total loan application volume — increased 16.7 percent from a week earlier to its highest level since March. The purchase index climbed 8 percent from the previous week and was 10 percent higher than a year ago. The refinance index jumped 20 percent and was 93 percent higher than a year ago. The refinance share of mortgage activity accounted for 74.8 percent of applications.

“The mortgage market got off to a fast start in the first full week of 2021, with both applications to refinance and buy a home solidly increasing on a weekly and annual basis,” said Bob Broeksmit, MBA president and chief executive. “With mortgage rates well below 3 percent but expected to rise slowly this year, many homeowners are acting now. Refinancing … represented three-quarters of all applications.”

The MBA also released its mortgage credit availability index (MCAI) that showed credit availability decreased in December. The MCAI slid 0.1 percent to 122.1 last month. A decrease in the MCAI indicates lending standards are tightening, while an increase signals they are loosening.

“Credit availability in December remained essentially unchanged, with an increase in government credit offset by a decrease in conventional credit,” Joel Kan, an MBA economist, said in a statement. “The decline in conventional credit availability was the first in three months and was driven by fewer ARM offerings. ARM loans have increasingly seen a smaller share of the market, given the historically low rates for fixed-rate mortgages. Availability for government loans and jumbo loans [has] increased for four months and three months in a row, respectively.”

Source: washingtonpost.com

Triumph Lending Review: A Near Perfect 5-Star Rated Lender

Posted on February 2nd, 2021

One of the highest-rated mortgage companies on LendingTree goes by the name “Triumph Lending,” which is a division of its larger parent company Network Funding, LP.

The Texas-based direct lender boasts an incredible 5-star rating out of 5 from more than 1,100 customer reviews, meaning they must be doing something right.

They also feature an elephant in their logo, which explains the choice of image above.

Much of their lending appears to take place in The Lone Star State, so if you live in Texas, they could be a good choice if customer service is important to you.

Triumph Lending Fast Facts

  • Direct-to-consumer mortgage lender
  • Founded in 1998, headquartered in Houston, TX
  • A division of parent company Network Funding, LP
  • Offer home purchase loans and mortgage refinances
  • A LendingTree Certified Lender (top-10 in customer satisfaction)
  • Licensed to do business in six states (most active in Texas)

Triumph Lending a direct-to-consumer mortgage lender that seems to live online, meaning you can apply for a home loan remotely from their website.

The Houston-based company actually got its start as a wholesale mortgage lender, meaning they worked exclusively with mortgage brokers, as opposed to the general public.

Later, Triumph transformed into what they describe as a “hybrid retail mortgage origination company,” meaning they likely have both a retail and wholesale lending division, and/or can broker out loans when necessary.

What this means to homeowners and prospective home buyers is you can work with them directly to obtain a mortgage by calling them up or visiting their website.

They were founded in 1998 by Rex Chamberlain (current CEO) and Greg “Buzz Baker (president), who also run parent company Network Funding, LP.

At the moment, they appear to be licensed to do business in the following states: Arizona, Colorado, Florida, Illinois, Texas, and Virginia.

How to Apply with Triumph Lending

  • You can call, request a quote online, or simply apply immediately via their website
  • Their digital application allows you to apply in either English or Spanish
  • They embrace the latest technology but believe there’s no substitute for one-on-one interaction
  • Borrowers can manage their loan from start to finish via the online portal

You’ve basically got three options here. You can simply call them up on the phone to speak with a licensed loan officer and obtain pricing and loan options.

Or you can fill out a short quote request form on their website and wait for a loan officer to call you back.

Alternatively, you can visit their website and click on “Apply Now” and begin immediately by creating an account.

My recommendation is to always get pricing first, then decide if the company is competitive enough to follow through with the application. After all, you don’t want to waste your time or theirs.

Triumph says they offer an “all-online mortgage application,” which I assume means they use a digital platform that allows you to link financial accounts, scan/upload documents, and eSign disclosures.

You also get paired with a dedicated loan officer, processor, and closing team who will guide you step-by-step from start to finish.

Applicants can manage their loan 24/7 via the secure online borrower portal, which provides real-time updates and current loan status.

Based on their many positive testimonials, it sounds like they make it super easy to apply for a home loan.

Loan Programs Available at Triumph Lending

  • Home purchase loans
  • Home renovation loans
  • Refinance loans: rate and term and cash out
  • Conforming loan backed by Fannie Mae and Freddie Mac
  • Jumbo home loans
  • FHA loans
  • VA loans
  • USDA loans

Triumph Lending offers both home purchase loans and mortgage refinance loans, including rate and term refis and cash out refis.

If you’re buying or currently own a fixer-upper, you can also apply for a home renovation loan.

You can get a conforming loan backed by Fannie Mae and Freddie Mac, or a jumbo loan if your loan amount exceeds local loan limits.

They have the full slate of government-backed loan programs available, including FHA loans, USDA loans, and VA loans.

With regard to loan types, you can get a fixed-rate mortgage such as a 30-year or 15-year fixed, or a hybrid adjustable-rate mortgage, including a 5/1 ARM or 7/1 ARM.

They lend on all the usual property types, including single-family residences, condos/townhomes, and 1-4 unit investment properties.

Triumph Lending Mortgage Rates

While they do say they’ve got the “most competitive rates and terms on the market” right on their website, they don’t actually reveal their mortgage rates anywhere.

Some of the bigger banks and lenders will show you daily mortgage rates just to give you an idea of pricing, which is a nice touch.

Unfortunately, this isn’t the case with Triumph Lending. So if you want to get pricing, you’ll either need to call or submit a free rate quote request on their website.

This is probably the best way to get started as you can determine how their pricing stacks up to other mortgage companies out there.

As always, be sure to compare both the interest rate offered along with the closing costs, since you need to get an apples-to-apples comparison, and cannot do so without both.

Triumph Lending Reviews

Where Triumph Lending really seems to shine is in customer satisfaction. In fact, they’re nearly perfect based on their reviews.

Per LendingTree, they’ve got a 5-star rating out of 5 from over 1,100 reviews, with all 5-star reviews expect for two, which are 4-star reviews. That’s pretty impressive.

Additionally, they are a “Certified Lender,” which is defined as having demonstrated organizational commitment to employee development while providing “exemplary service” to LendingTree customers.

They also landed in the top-10 for customer satisfaction on the LT platform in both the second and third quarter of 2020.

On Zillow, it’s the same story – a near-perfect 4.99-star rating out of 5 from more than 350 reviews.

As I scanned through the reviews, I noticed that many of them highlighted the fact that the interest rate received was lower than expected, as were the closing costs in a lot of cases.

They’ve also got a 4.5-star rating on Google from about 15 reviews and a 5-star rating on Yelp from about 25 reviews.

While they’re not an accredited company with the Better Business Bureau, they do have an ‘A+’ rating based on their complaint history.

This means they’re generally good about resolving any customer issues that may come up quickly and competently.

Triumph Lending Pros and Cons

The Good

  • You can get started directly from their website
  • Offer a digital mortgage application using the latest tech
  • Can apply for a mortgage in both English or Spanish
  • Plenty of loan programs to choose from
  • Amazing customer reviews (nearly perfect ratings)
  • A+ BBB rating
  • Free mortgage calculator on their website

The Not

  • Do not publicize mortgage rates or lender fees
  • Not licensed in all states

(photo: Neil Ransom)

Source: thetruthaboutmortgage.com

What Is Mortgage Insurance?

If buying a home is your next financial goal, then you may have heard about mortgage insurance. Mortgage insurance is probably not what you expect it to be. We will cover what you need to know about mortgage insurance before you buy your future home.

happy family

What is mortgage insurance?

Mortgage insurance is a way for lenders to protect themselves from high-risk borrowers. The mortgage payments allow lenders to compensate for any losses due to defaulting on a mortgage loan.

When you think of insurance of any kind, you typically think that the insurance would help you in times of need. Instead, this helps mortgage lenders to limit the risk from borrowers, which allows for more lending to happen.

The mortgage insurance payments protect the mortgage lender. It does not protect you in any way if you fall behind on your monthly payments.

Mortgage insurance makes the home buying process more expensive for the borrower. However, it will make it possible for some to buy a home at all. If your down payment is less than 20%, then receiving a loan with mortgage insurance attached may be the best (and only) way to secure a home loan.

How Mortgage Insurance Works

As the borrower, you would need to pay extra money to the lender as a form of insurance. The method of payment can vary by lender.

You may need to pay an upfront fee or a monthly insurance payment that is added to your mortgage payment. Some lenders may even require both an upfront fee and an additional monthly payment.

The payment amount will vary widely based on your own credit, loan amount, and ability to pay the mortgage. Typically, low-risk borrowers will be entitled to lower mortgage insurance costs. High-risk borrowers should expect to pay a higher mortgage insurance premium.

The borrow is basically paying for the privilege of borrowing the money even though the borrower has a high associated risk.

Why would I get mortgage insurance?

Borrowers are required to pay mortgage insurance if they make a down payment of less than 20% of the home purchase price. Many federal programs like the FHA and USDA loans also require mortgage insurance as a part of the loan conditions.

If you are purchasing a home through a loan, your lender may require that you purchase mortgage insurance. You may have no choice in the matter if your lender dictates that you must purchase mortgage insurance to receive the loan.

It is generally not helpful for your financial situation to sign up for mortgage insurance. If you have the option to skip mortgage insurance, then that may be a good choice, depending on your situation. Otherwise, you will be paying for your lender to be protected, but you will not gain anything in the process.

What are the common types loans that require mortgage insurance?

There are many different kinds of home loans. Each type of loan has a slightly different type of mortgage insurance associated with it for some high-risk borrowers. We will cover the most common kinds below.

Conventional Loans

Conventional loans are typically offered through private companies. Depending on your down payment amount and your credit score, the private lender may require private mortgage insurance (PMI) as a condition of the conventional loan.

The amount of private mortgage insurance will also vary based on the down payment, loan amount, and your credit history. Higher credit scores and down payments will generally lead to lower required mortgage insurance premiums.

With private mortgage insurance, the premiums are usually paid out monthly with no initial upfront fee. You may also have the ability to cancel your private mortgage insurance in certain situations.

Department of Veterans’ Affairs Loans

If you are a service member or a veteran, you have likely heard of the VA loan. The idea is to help these honorable men and women purchase homes.

The VA will back your loan, so there are no monthly mortgage insurance fees required. However, you may need to pay an upfront funding fee that will act as mortgage insurance. The initial funding fee will vary based on your military history, down payment, credit score, and several other factors.

Although the upfront funding fee is not termed as mortgage insurance, the idea is the same.

US Department of Agriculture Loans

USDA loans offer great mortgage rates meant to help low to moderate-income home buyers in rural areas. The hope is that these loans will help to infuse life back into rural areas.

The loans offer zero down payments to home buyers, but mortgage insurance is required. A USDA loan requires that you pay an upfront premium as well as monthly premiums.

Federal Housing Administration Loans

FHA loans are insured by the Federal Housing Administration but are completed through private lending companies.

FHA loans offer another low down payment option for people with lower credit scores. However, there is an enforced maximum loan limit that varies by county.

Every loan insured by the FHA requires mortgage insurance. You pay the annual mortgage insurance premium (MIP) monthly for the life of the FHA loan. The upfront and monthly mortgage insurance premium amounts vary by loan, but you can expect to pay it with FHA loans.

See also: FHA Loan Requirements for 2021

Can I avoid paying for mortgage insurance?

The easiest way to avoid mortgage insurance is by making a down payment of 20% or more. Of course, this is not feasible for every situation. Depending on your current financial picture, you may need to pay for mortgage insurance in order to purchase a home.

Alternatively, you can request to have your PMI canceled once the equity in your home reaches 20% of the purchase price or appraised value.

Bottom Line

Mortgage insurance is a required expense for many home buyers. If you are unable to make a 20% down payment on your home purchase, you will likely be required to pay for mortgage insurance.

Source: crediful.com

VA Loan Myths


Tim Lucas

Posted on: December 12, 2020

Because of their complexity relative to other mortgage programs, VA loans are the subject of plenty of different myths. Some of these myths are based on truths, but what you hear can end up being very misleading, and it could be entirely untrue.

If you were to take these myths at face value without doing your own research, you might miss out on one of the best mortgage products available. Here’s the truth to some of the biggest myths surrounding VA loans:

Click to check today’s VA rates.

Myth #1: VA loans can only be used once

Because of how useful VA loans can be, some people believe they’re too good to be true. The myth VA loans can only be used once is completely false, but it’s easy to see where this mistaken idea might have come from. If you currently have a VA loan, you are not eligible for a second one.

However, this doesn’t mean you aren’t eligible for a second VA loan ever again.

Once you pay off your current VA loan, you’re eligible to use the program again. There are some small differences after the first time, such as a slightly higher cost at closing. But aside from the small differences, your second VA loan will be similar to the first one that you paid off.

Myth #2: VA members are guaranteed a mortgage

Nobody is guaranteed any type of mortgage, regardless of which mortgage program they’re applying for or whether they’re veterans. You must be approved for a mortgage, which means — depending on which program you choose — meeting credit requirements and having a specific debt-to-income ratio, among other factors.

When a lender says a VA loan is “guaranteed,” they mean the VA backs the loan. The VA guarantee is there to tell veterans they can get a mortgage with no required down payment, competitive mortgage rates and other benefits.

You can learn more about what “guaranteed” means here.

Myth #3: VA appraisals are impossible to pass

It is true that VA appraisals can be stricter than an appraisal with a different mortgage type. But that doesn’t mean they’re impossible to pass, and many VA home buyers don’t have any trouble with the VA appraisal at all. Because the VA is backing the home, they want to confirm it’s in good and livable condition before they approve any type of loan.

If you are applying for a VA loan and want to have a quick, speedy appraisal process, check here for some tips on how to pass the appraisal.

Check your VA eligibility.

Myth #4: Today’s home prices require a higher down payment

There’s no denying home prices have increased over the past decade. This has made homes harder to afford for many would-be home buyers, since down payments are usually used to lower the costs of monthly payments. The higher the downpayment, the lower the monthly payments.

Here’s the truth: with a VA loan, you don’t need to make a down payment and you can still afford a house. The key to buying an affordable home isn’t the size of the down payment, but finding a home within your means.

Many VA members purchase a home without a large down payment. In March, the average down payment for a VA loan was just two percent – below the minimum 3.5% required by FHA loans, and much lower than the traditional 20%.

While a larger down payment will lower your monthly costs, you probably don’t need to make a larger downpayment to be eligible for a VA loan.

Myth #5: VA loans take forever

When comparing FHA loans, conventional loans and VA loans, VA loans are typically the slowest program. According to mortgage software giant Ellie Mae’s October 2020 Origination Report, VA loans took an average of 54 days to close.

By comparison, FHA loans took 52 days to close, and conventional loans took an average of 54 days as well.

So yes, a VA loan is likely going to take longer to close than another program. However, a difference of 2-3 days is small when you consider how much lower VA rates are.

VA loans are slower than other mortgage types, but they do not take forever.

Click to start the VA home buying process.

Myth #6: Surviving spouses don’t qualify for VA mortgages

Actually, many spouses of veterans can qualify for a VA home loan.

Generally, the spouse must be un-remarried and the veteran must have died during service or from service-connected causes. But there are exceptions and other ways a surviving spouse can be eligible.

And, surviving spouses are exempt from paying the VA funding fee. To confirm your eligibility, your VA loan officer will request your Certificate of Eligibility (COE) and verify that it has Entitlement Code 06.

Myth #7: All realtors are good VA home loan advisors

There is no VA loan certification for real estate agents. As a result, you shouldn’t look to your real estate agent for reliable information about VA loans. And an underinformed real estate agent can unintentionally push VA-eligible borrowers towards programs that might be less advantageous for them.

Instead, you should get your VA loan facts from a VA specialty lender whose primary product is VA-backed loans.

The VA loan facts are hard to beat

The proliferation of myths about VA loans can obscure the fact this is simply one of the best loan products available to aspiring home buyers.

The VA loan rates available to eligible buyers — combined with the low down payments — are hard to beat with a conventional or FHA loan. But with a little research and a well-informed VA lender, you could be on your way to a VA home loan.

Click to check today’s VA rates.

Source: militaryvaloan.com