Money lender – Agapes GR http://agapesgr.org/ Fri, 18 Nov 2022 06:38:48 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://agapesgr.org/wp-content/uploads/2021/06/icon-2021-06-25T194407.031-150x150.png Money lender – Agapes GR http://agapesgr.org/ 32 32 The New Reality: A Monthly Car Payment of $700 https://agapesgr.org/the-new-reality-a-monthly-car-payment-of-700/ Fri, 18 Nov 2022 01:23:05 +0000 https://agapesgr.org/the-new-reality-a-monthly-car-payment-of-700/ When average monthly payments for new cars topped $700 in May and car prices hit record highs, many would-be car buyers decided to stay away until the market returned to normal. the normal. Six months later, normal seems further away than ever. The Federal Reserve continues to raise the federal funds rate, driving interest rates […]]]>

When average monthly payments for new cars topped $700 in May and car prices hit record highs, many would-be car buyers decided to stay away until the market returned to normal. the normal.

Six months later, normal seems further away than ever. The Federal Reserve continues to raise the federal funds rate, driving interest rates on auto loans to a 20-year high, and the average transaction price for new cars remains above $48,000.

According to data firm Cox Automotive, the average monthly payment for a new car hit a new high of $748 in October. Average used car payments exceeded $550, based on a 70 month term loan and 10% down payment.

Automotive research firm Edmunds reports that the average October auto loan APR is 6.3% for new vehicles and 9.6% for used vehicles. Edmunds senior knowledge manager Ivan Drury says slight improvements in car supplies and prices are negated by the rate increase.

“Even if you save $500 on the purchase price of a car, it could be wiped off the interest rate if you don’t get the exact APR you need,” says Drury.

To illustrate Drury’s point, financing a $46,000 car for six years with an APR of 3.1% would result in a car payment of $700. Reduce the loan amount to $42,000 at 6.3% APR for the same term, and you still have a car payment of $700.

Matt Degen, Editor at Kelley Blue Book, says: “From what we’ve seen so far, it’s even harder to get even a used car. And I don’t know if that will change much. Even if inventory issues ease further, with rising interest rates and tougher lending standards, this could just be another struggle for people to overcome.

High payments for cars affect all car buying segments

During Cox Automotive’s quarterly auto industry call, senior economist Charlie Chesbrough said, “No buyer can escape these higher rates. They are passed on to everyone, which means the monthly payments will be even higher. »

On the same call, chief economist Jonathan Smoke said the “deadly combination” of high car prices and high interest rates were driving low-income, low-credit buyers out of the auto market.

At the other end of the spectrum, Edmunds recently reported that 14.3% of consumers commit to monthly car payments of $1,000 or more when financing a new vehicle. The report pointed to consumer preferences for luxury brands and large trucks and SUVs as one of the factors driving these car payments over $1,000.

Says Drury, “I tell people if a car payment of $1,000 makes sense for you mathematically and for your budget, that’s fine. But we see in our data where someone can pay $1,400 per month for a 72 month term at 10% APR. We are talking about nearly $30,000 in financing costs. What I can’t defend.

When waiting to buy a car is not an option

Twenty-six-year-old Tim Roeder of Westfield, Indiana and his wife had no car payments when 10-year-old Roeder’s car needed expensive repairs. Roeder says they weren’t “super excited” about accepting payment for a car in today’s market, but some planning and job promotion helped them get it done.

Roeder and his wife discussed the budget, used a car loan calculator set a maximum payment amount and trade-in values ​​sought. Roeder took the day off and drove to the dealership with hard numbers in mind, but ready to go. He says: “It helped me to feel comfortable with the decision and to pull the trigger, because I already knew in advance which numbers I was okay with.”

As Roeder discovered, managing the numbers up front puts guardrails around the purchase, giving buyers the power to say yes or no.

Even as interest rates and car payments rise, conventional car buying advice can still be helpful for those who can’t put off buying a car.

In a typical car market, the rule of thumb is to spend less than 10% of your take home pay on car payments. If it’s overkill, try reallocating other expenses. Avoid going for a long-term loan to lower the payment, as you could end up upside down and owe more than the value of the car.

Compare interest rates from different lenders. Many lenders offer pre-qualification, which gives you rate estimates without affecting your credit score. Then apply for a pre-approved loan and take it to the dealership, giving them a rate to beat. If you don’t do your homework and end up with a double-digit interest rate from a dealership, you may still be able to refinance at a lower rate and payment with another lender.

Another long standing tip is to make a down payment of at least 20% on a new car and 10% for used cars. If this is not possible, any down payment may help reduce your payment.

Says Drury, “You can get an older vehicle, and luckily some are good for easily 100,000 miles. I tell people you can buy older and deeper on the used market if you’re trying to save money or just to get a vehicle to hold you over for another year or two.

If you’re buying an older vehicle, look for models known for their longevity, check maintenance records, invest in a pre-purchase inspection, and avoid a long-term loan that could upset you as the car loses value.

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How to refinance a car loan with bad credit https://agapesgr.org/how-to-refinance-a-car-loan-with-bad-credit/ Tue, 15 Nov 2022 17:51:22 +0000 https://agapesgr.org/how-to-refinance-a-car-loan-with-bad-credit/ Have you ever wondered if you could refinance a car loan with bad credit? The answer is yes, you absolutely can. Under the right circumstances, refinancing can help you negotiate better terms and save money. However, car loan refinancing is not for everyone. Unless you meet certain conditions, you might not get the interest rate […]]]>

Have you ever wondered if you could refinance a car loan with bad credit? The answer is yes, you absolutely can. Under the right circumstances, refinancing can help you negotiate better terms and save money.

However, car loan refinancing is not for everyone. Unless you meet certain conditions, you might not get the interest rate you want. So, before trying to get a new car loan, consider some factors so you can make an informed decision.

Read on to learn about the requirements for refinancing a car loan, the steps in the refinancing process, the benefits of negotiating a new car loan, and more.

What are the requirements for refinancing a car loan with bad credit?

A question car owners often ask is, “What credit rating do I need to refinance a car loan?” The answer is not always simple.

There is no universal minimum credit score to determine your eligibility. Car owners could potentially get a refinance offer even with credit scores below 580, which is considered bad credit. This is because lenders may have different requirements for approving your new loan.

They also consider many other factors to calculate the risk involved when negotiating a new loan, such as:

  • Revenue: The amount of money you earn tells the auto refinance lender if you have enough money to pay off the money you owe. Just like when you took out the original auto loan, the higher your income, the higher your chances of being approved for the auto loan refinance.
  • Debt to income ratio: Your debt-to-income ratio (DTI) is a percentage based on the sum of your monthly debt payments divided by your monthly income. In this scenario, “debt” means everything you pay monthly, including rent or mortgage. So if you owe $1,000 in loan payments plus a monthly mortgage of $1,000, your debt is $2,000 per month. If you earn $5,000 in income over the same period, your DTI would be 40%. In most cases, such a low DTI would help your refinance case.
  • Loan-to-value ratio: The loan to value ratio (LTV) is a percentage that measures the cash value of your vehicle compared to the dollar value of your loan. A lower LTV is better because it means you owe less on your loan balance than the value of the vehicle. On the other hand, a higher LTV could make it harder to get approved for a car loan refinance.

That being said, you want to get your credit rating as high as possible before you go ahead with refinancing your car loan. People with higher credit scores improve their chances of getting lower interest rates. You can also avoid having to get a co-signer for your refinanced auto loan.

How to refinance a car loan with bad credit in 5 steps

If you’ve decided to refinance your car loan, follow these steps to ensure you get the best deal possible:

1. Check your credit score

First, visit AnnualCreditReport.com to see where you stand on credit. Through this website, you can access your reports from the three major credit bureaus Equifax, TransUnion, and Experian without affecting your credit score. Weekly reports are available free of charge until the end of 2022.

One thing you want to check is if your score has improved since you took out the car loan you want to refinance. If so, you can feel more confident in your eligibility for refinancing with better terms.

Another thing to look for is any inaccurate or outdated data. Specifically, try to identify missed payment claims or activity related to accounts that don’t belong to you. If you find something wrong, contact the credit bureaus to file a dispute. Each has an online portal to submit and resolve issues.

2. Compile your information

Next, compile all of the documentation you might need to apply for a car loan refinance. You will need these documents to prove to the lender your identity, your credit score and the value of your vehicle:

  • Identification data: Include official documents to verify your name, address, phone number, income, employment, and social security number. Your driver’s license, identity card, bank statements, employment contract, social security card and birth certificate are examples of documents you can use.
  • Loan information: Documentation of your existing loan is essential for refinancing. The documents you include must show the identity of your lender, your loan account number and the amount of the vehicle repayment.
  • Car Information: Finally, you will need documents verifying your vehicle information, such as the registration number, vehicle identification number, and the make, model, and year of the car.

3. Consider your options

Now you can shop around for the best refinancer. Your current lender is a good place to start. If they offer refinance options for auto loans, working with them can make the process easier. After all, they already know who you are and have your information in their database. In some cases, working with your current lender can get you the best rates.

Even if your lender offers a good deal, research other options before making your final decision. Consider a reputable bank or credit union in your area and also research lender rates online.

4. Apply for rates

Auto refinance lenders often post promotional rates to attract potential borrowers. To understand exactly what to expect from each lender, apply to each one you like. You will not accept every lender’s offer. You just need to know what rates they intend to give you.

Major bureaus encourage this type of comparison shopping by allowing consumers to submit multiple requests within 14 days. If you stay within this period, your credit score doesn’t take a hit.

5. Choose the best lender

After comparing the offers from your potential lenders, choose the one that offers the best terms for your needs. Because you’ve already submitted an application, all you have to do is sign up with your preferred lender. As for the others, just let their offers run out.

Your new lender will have received your documentation and should handle much of the process from now on. They usually pay off your existing loan, although some lenders give you the money to transfer to your previous lender instead.

Why refinance a car loan with bad credit?

Vehicle owners may decide to refinance their auto loans for a variety of reasons:

Lower monthly payments

The most common reason to refinance a car loan is to lower your monthly payment. Refinancing involves replacing your existing loan with a new one. If you can extend the term of the loan through refinancing, you may end up paying less in principal each month. Plus, if you qualify for a lower interest rate, you’ll pay less in the long run.

Either way, you’ll have an easier time keeping track of your monthly car payments. However, if you extend the term of your loan, you may end up paying more interest overall.

Better credit score

Lower monthly payments can lead to a second refinancing driver: improving your credit rating. Here’s how it works:

  1. When you’re not struggling to pay off your monthly debts, you’re less likely to miss payments.
  2. As you continue to meet your loan requirements, you prove that you are a reliable borrower.
  3. As a result, your credit rating is likely to increase. In fact, if you pay off your auto loan without fail, your credit score has probably already gone up.

Savings

Ideally, lower monthly payments from refinancing allow borrowers to set aside additional cash. These ongoing money-making opportunities can lead to positive results. Over time, you can use accumulated savings to pay for other expenses, including emergencies.

Reprieve

A temporary benefit of refinancing is the potential reprieve from car loan payments. Refinancing a loan is a time-consuming process. It is not uncommon for several months to pass between the start of an application and the effective date of your new loan.

During this time, you get some debt relief. Take advantage of the reprieve by saving your earnings so that you’ll be in better financial shape when your payments start again.

Eligibility for Future Loans

While you’re building your credit score, you’re also preparing for future financial benefits. You will find it easier to get loan approval with preferential interest rates. These loans help establish a positive cycle of credit building.

Collection

Sometimes unexpected events in your life lead to expenses that you are not prepared for. When this happens, you need cash fast. Some lenders offer borrowers the option of cashing in the equity in their vehicle. However, this is generally only advisable if you have initially paid a large deposit.

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Borrower shoots loan shark in Delhi https://agapesgr.org/borrower-shoots-loan-shark-in-delhi/ Sat, 12 Nov 2022 04:16:22 +0000 https://agapesgr.org/borrower-shoots-loan-shark-in-delhi/ New Delhi: A pawnbroker was gunned down in broad daylight in the GTB enclave of Delhi by a borrower. The deceased was identified as Harish Bhati, 43, who landed the borrower Rs 40,0000. The accused was identified as Gagan jail who claimed he shot Bhati because he (Bhati) used to assault and mistreat him. The […]]]>

New Delhi: A pawnbroker was gunned down in broad daylight in the GTB enclave of Delhi by a borrower.

The deceased was identified as Harish Bhati, 43, who landed the borrower Rs 40,0000.

The accused was identified as Gagan jail who claimed he shot Bhati because he (Bhati) used to assault and mistreat him.

The incident happened Friday at a residential complex in the area.

Bhati was shot dead by Jain and was found injured by the police.

Read also : Rehabilitation of Landless and Flood Victims in Assam

Although he was taken to hospital immediately, doctors pronounced him dead.

Bhati was found to be involved in the moneylending business and was named in at least 10 cases.

Police identified Jain through CCTV footage as living in the same Janta Flats compound where Bhati was shot.

Jain was also named in four cases and was arrested after a brief operation.

Read also : Assam: Minister Nitin Gadkari announces projects worth Rs 1.6 lakh crore in northeast

Jain had taken Rs 40,000 from Bhati and paid Rs 4,000 in interest. However, Jain claimed that despite paying back on time, Bhati had a habit of assaulting and abusing him publicly.

For this, he decided to kill him and shot him on Friday morning.

Northeast Now is a multi-app based hyper-regional bilingual news portal. Email us at: contact@nenow.in More by NE NOW NEWS

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“Last night my Uber driver was a loan officer.” https://agapesgr.org/last-night-my-uber-driver-was-a-loan-officer/ Wed, 09 Nov 2022 17:59:39 +0000 https://agapesgr.org/last-night-my-uber-driver-was-a-loan-officer/ The steady pace of austere news in the mortgage industry punctuated by headlines announcing layoffs and closures in the ranks of independent mortgage banks continues to play out, with several lenders over the past two weeks adding to the torrent of pink slips. The rise in interest rates, triggered by Federal Reserve tightening policies, is […]]]>

The steady pace of austere news in the mortgage industry punctuated by headlines announcing layoffs and closures in the ranks of independent mortgage banks continues to play out, with several lenders over the past two weeks adding to the torrent of pink slips.

The rise in interest rates, triggered by Federal Reserve tightening policies, is the main cause of pain for the mortgage industry right now. Last week, mortgage lender and manager Mr. Cooper revealed that it was laying off some 800 employees.

About 80% of the volume of our industry is done by about 40% of the LOs. And so the bottom 20% of the volume [handled by 60% of LOs] this is the part that has not yet appeared in [the layoff] data again.

Garth Graham, Senior Partner at Stratmor Group

Similarly, news broke this week revealing that the Independent Mortgage Bank (IMB) New US funding had cut its ranks of employees by 240 – followed by news that the non-QM lender Athas Capital Group closed its doors and laid off more than 200 employees. In September alone, IMBs cut some 8,200 jobs, a recent Inside Mortgage Financing analyse of US Bureau of Labor Statistics the data shows.

These job losses, however, are just the tip of an iceberg that is expected to sink even more careers into the ranks of CIOs before the ice thaws. Garth Graham, Senior Partner and Director of M&A Activities for the Stratmor Groupsaid many of the layoffs in the IMB industry so far have been for employees in support roles, with loan officer jobs being the latest to be dropped.

“This whole cut didn’t really start until about March, so we’re about six months into this cycle,” Graham said. He added that there were around 440,000 to 450,000 people employed by IMBs “at the top of our industry”. [last year]and there were only about 300,000 before rates started falling during COVID [pandemic].”

“So there are about 150,000 people too many,” Graham said. “In these 150,000, there are a lot of people of origin, and LOs are just starting to be impacted.”

Trace loan officer output

Graham predicts the overall layoffs will ultimately affect 40% to 50% of the IMB industry’s total mortgage origination staff and about a third of the industry’s overall employment. IMBs are non-custodial credit institutions which, according to the Urban Institute‘s Housing Finance Policy Center, account for nearly 77% of all agency-eligible mortgages nationwide.

“The MBA just released its latest forecast, and everyone is hanging on to the $4.4 trillion [mortgage origination] market [in 2021] now expected to fall to a $2 trillion market [next year]”, Graham said. “I’ve been hanging on to the 13 million first mortgages we did last year and are expected to be 5.5 million next year.

“From a staffing perspective, that looks a lot more dire than the $2 trillion title.”

Jeff Walton, CEO of a mortgage data analytics company InGenius, during a recent interview offered this perspective on how dire conditions are for some in the industry: “Let me put it like this. Last night my Uber driver was a loan officer.

The data provided by InGenius offers a deeper insight into the state of the industry for loan officers. According to InGenius, in 2021 the total headcount of loan officers nationwide was 353,119 – with 234,070 LOs having originated three or more loans.

This is an increase from 263,494 LOs in 2019, with 180,713 of this group having issued three or more loans for that year, representing an increase of almost 30% between 2019 and 2021 (the refinancing boom) for the most active loan officers.

As of July 15 this year, however, about six months into the rate hike cycle, InGenius data shows there were 276,837 licensed loan officers in the country. Of that total, 188,264 had three or more mortgages, down 45,806 from 2021, down nearly 20% over the period among the most active LOs.

This means that the current loan officer workforce has already been reduced to levels close to LO employment in 2019. Graham points out that most of this 20% drop in LO workforce as of July 15, compared to to 2021, however, occurred after the first quarter of that year.

The top 20% of lenders account for 80% of lending volume and employment. Therefore, unless there is substantial consolidation at the top, you should be able to gauge job losses by watching for layoffs in the larger 200 [IMB] companies, which is on the right track.

Brett Ludden, managing director at sterling point advisors

Graham predicts that by the end of the year, this figure could reach an overall reduction of 40-45% in LO workforces, compared to 2021.

“About 80% of the volume in our industry is done by about 40% of LOs,” Graham added. “And so the bottom 20% of the volume [handled by 60% of LOs] this is the part that has not yet appeared in [the layoff] data again.

“There’s not a lot of volume at the bottom. The converse of this is that the top 40% of OL perform 80% [of the volume] are worth a lot to good companies.

Graham added that industry-wide, IMB employment is “certainly returning to pre-COVID levels at 300,000 total jobs.”

“It’s painful for the 150,000 [or so people that are going to lose their jobs]he said, “but this is…not an existential meltdown like we had in 2008.”

Read job tea leaves

Brett Ludden, managing director of mergers and acquisitions at Sterling Point Advisorspredicts that the overall reduction in employment among the nation’s 1,000 largest IMBs could reach 54% by mid-2023. 272,000 IMB jobs could be lost by mid-2023, which would result in a total workforce of 229,000 people in the industry.

Ludden points out that the projections are based on modeling estimates, adding that the best measure of job losses in the IMB industry will be revealed by the lenders themselves.

“The top 20% of lenders account for 80% of lending volume and employment,” he added. “Therefore, unless there is substantial consolidation at the top, you should be able to gauge job losses by watching for layoffs in the Big 200. [IMB] companies, which is on the right track.

A recent report from fitch reviews says the decline in mortgage originations in 2022 continues to exceed the rating agency’s expectations, leading to lower revenues for lenders due to “lower origination volumes outpacing spending cuts.”

“Layoffs, channel exits and asset sales have accelerated, even with better capitalized players,” the Fitch report notes. “Town, JP Morgan and Wells Fargo reduce staff and operations, while Santander exited the US mortgage market in February and partnered with Rocket [Mortgage] to issue mortgages for its clients.

“Small players such as real estate tech startups Reali and Sprout Mortgage closed, while First Guaranty Mortgage Corp. filed for Chapter 11 bankruptcy. [In addition,] loanDeposit exited the wholesale channel, intending to sell its $1 billion pipeline and refocus on consumer/retail channels.

Optimistic and well-prepared companies are beginning to see opportunities to recruit key personnel and prepare for a refinancing boom when rates eventually come down.

Andrew Rhodes, Principal and Head of Trading at Mortgage Capital Trading

David Hrobon, a director of the Stratmor Group, wrote in a recent commentary that by the end of the year, the mortgage advisory firm expects around 50 IMB merger or acquisition transactions “will be announced or closed,” which is “50% more deals than in 2018, the next highest year for lender consolidations in three decades.

“Additionally, according to the Bureau of Labor Statistics, our industry employed 427,000 employees in March of this year,” Hrobon added. “Given the [dour] loan volume forecast… the number of businesses and employees in the industry will no doubt look very different at this time next year.

Ludden predicts that up to 30% of the top 1,000 IMBs will disappear by the end of 2023 via sales, mergers or bankruptcies following the double whammy of inflation and still-rocking interest rates. rise.

“You have a number of entities that are mortgage originators and are seeing significant declines in mortgage volumes and [loan] price,” wrote John Toohig, head of whole loan trading at Raymond Jamesin its weekly online newsletter, “Let’s Talk Loans”, published on LinkedIn. “Startups skyrocketed on ultra-low rates, people got hired fast, mortgage bankers made a ton of money, multiple IPOs, the market got crowded, then the Fed took the punch bowl [by unleashing higher interest rates].”

How bad will it get?

Tom Piercy, Managing Director of Incenter Mortgage Advisorssaid that in general, the outlook for the housing industry is “poor for the foreseeable future.”

“However,” he added, “it could be very good for companies that are well positioned on their balance sheets, which means lower debt ratios and strong cash or liquid assets, and they have profitable retail originations.” Piercy said those lenders will see the opportunities grow.

“The mortgage market will consolidate, but that comes from recent record profits and the boom years [in 2020 and 2021]”said Andrew Rhodes, Sr., Director and Head of Trading at Mortgage capital negotiation. “Optimistic and well-prepared companies are beginning to see opportunities to recruit key personnel and prepare for a refinancing boom when rates eventually come down.”

When will this rate change begin? Graham from Stratmor said, based on the Mortgage Bankers AssociationAccording to the most recent forecasts, we can expect “a recession and lower interest rates in the second half of next year”.

“The first time [the Federal Reserve] lower rates, that’s the start of the change,” added Walton of InGenius. He said there will likely be a lag between any rebound in the housing industry and a decision by the Fed to start lowering interest rates.

“But, if rates come down precipitously, like they’ve gone up, then you’ll see the rebound much faster,” Walton added. Until then, he said, productive loan officers, “those who are part of the 40% doing 80% of the business”, they will stay in the trenches adding more prospects and borrowers to their lists.

“I was a loan officer when I started in the business,” Walton added, “and through the downturns I just added more realtors and builders or whatever, and I always got myself came out better on the other side because I had resistance.”

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Mortgage rates rise above the 7% barrier | Mortgages and advice https://agapesgr.org/mortgage-rates-rise-above-the-7-barrier-mortgages-and-advice/ Mon, 31 Oct 2022 21:17:00 +0000 https://agapesgr.org/mortgage-rates-rise-above-the-7-barrier-mortgages-and-advice/ Mortgage rates rose above the 7% threshold for the term of 30-year fixed mortgages this week, according to Freddie Mac. This is the first time that average rates have entered 7% territory since the beginning of 2002. Interest rates also increased for the 15-year fixed term and the 5/1 adjustable rate mortgage. Here are the […]]]>

Mortgage rates rose above the 7% threshold for the term of 30-year fixed mortgages this week, according to Freddie Mac. This is the first time that average rates have entered 7% territory since the beginning of 2002. Interest rates also increased for the 15-year fixed term and the 5/1 adjustable rate mortgage. Here are the current mortgage interest rates, as of October 27:

  • Fixed 30 years: 7.08% with 0.8 point (compared to 6.94% a week ago, compared to 3.14% a year ago).
  • 15 years fixed: 6.36% with 1.4 points (compared to 6.23% a week ago, compared to 2.37% a year ago).
  • 5/1 year reviewable: 5.96% with 0.3 points (compared to 5.71% a week ago, compared to 2.56% a year ago).

Erika Giovanni

“The 30-year fixed-rate mortgage topped 7% for the first time since April 2002, leading to further stagnation in the housing market. As inflation persists, consumers are seeing higher costs at every turn, driving consumer confidence further down this month. . In fact, many potential buyers are choosing to wait and see where the housing market ends up, pushing demand and house prices even lower.”

– Sam Khater, chief economist at Freddie Mac, in an Oct. 27 statement

As mentioned in last week’s column, mortgage rates of 7% could become the “new normal” as the Federal Reserve struggles to rein in historically high levels of inflation. Rising interest rates have had a tangible impact on homebuilder confidence as well as consumer sentiment, and it’s understandable that many of us are suffering from data overload.

Amid such turmoil in the housing market, even the most seasoned analysts are grappling with an explanation. So in a recent Q&A, economists at real estate brokerage Redfin tried to clear up confusion about the housing market. Below are some of the most relevant advice they gave to potential buyers and sellers.

Indicator of the week: Words of wisdom from housing economists

Why Home Prices Haven’t Fallen and When They Might Fall

Although higher mortgage rates have long been expected to trigger a deceleration in house prices, house prices have remained stubbornly high in recent months. There are two reasons for this, according to Taylor Marr, deputy chief economist at Redfin.

“One is that supply has fallen along with demand, and the other is that home sale price data is a few months behind what’s happening in the real-time market. “, explains Marr.

As demand from home buyers has fallen, the inventory of homes for sale has also fallen. Indeed, many homeowners who benefit from advantageous mortgage rates of 3% will probably not sell their house and will exchange it for the interest rates of 7% offered today. But house prices are expected to fall eventually – it’s just a matter of waiting for housing data to catch up with current market conditions.

“Over the next six to 12 months, prices are expected to fall year-on-year, possibly double digits in some areas,” adds Marr. “They will still be higher than pre-pandemic levels, but many homeowners will be upset that their home values ​​have fallen.”

Who should consider buying a home in today’s market?

As a general rule, it always makes more sense to buy if you plan to live in the same home for the long term, even in turbulent short-term market conditions. Real estate has its ups and downs like any other asset class, but home values ​​tend to appreciate over the course of 10 years or more, Marr says.

“If someone is going to sit in a house for 10 years, the house is unlikely to lose value,” Marr says. “The 7% mortgage rates are a hard pill for many people to swallow. But there is a silver lining to high rates: competition is low and buyers have the opportunity to bargain with sellers.”

Redfin Chief Economist Daryl Fairweather adds that cash buyers could still consider buying now as mortgage rate volatility won’t impact their monthly payments. These buyers are able to take advantage of slower buying activity and may be able to negotiate with sellers on home price, closing costs or other contingencies.

But for the vast majority of buyers who need to finance their home with a mortgage, Fairweather’s advice is to consider markets where prices aren’t as sensitive to national trends.

“Home values ​​are unlikely to drop significantly in a place like Chicago or upstate New York, so buying in those places is less risky right now,” Fairweather says. “Home values ​​are likely to decline the most in pandemic boom towns like Phoenix, Boise and Austin; potential buyers in these areas should be more cautious entering the market at this time.”

Tips for those choosing a variable rate mortgage

Rising fixed interest rates have led many buyers to consider a variable rate mortgage instead. Data from the Mortgage Bankers Association shows that about 13% of mortgage applicants choose ARMs, which is the highest demand for ARMs since 2008. Although it may bring back bad memories for those who remember borrowing ARM during the Great Recession, economists say this mortgage product is very different today.

“Think about your long-term plans. If you plan to stay in a home for five years or less, MRAs are a good option,” says Marr. “‘Adjustable’ is in the name, but it’s fixed for a few years. But if you’re buying a house forever, ARMs are riskier because the rate — and your monthly payment — could go up in five years.”

ARMs may also be an option for those planning to refinance their mortgage before the fixed rate period expires, Fairweather adds. “Historically, most home buyers have been able to refinance at a lower rate within five years, given the decades-long downward interest rate trend.”

But Marr reminds potential ARM borrowers of an important caveat: “Refinancing is expensive. It typically costs between 2% and 5% of your loan value, which can amount to tens of thousands of dollars.”

Before choosing a variable rate over a fixed rate, review your options with your lender and determine if refinancing will be worth the interest savings in the long run.

What today’s potential buyers (and sellers) should know

Many buyers who are spooked by today’s high mortgage rates – and the uncertain implications the rates have on future home values ​​– are choosing to put off buying a home. This is not possible for all buyers, however. Some Americans are forced to relocate due to job change, divorce, or other life circumstances.

“For people buying a home right now, make sure you don’t stretch your budget,” Fairweather says. “Mortgage rates are high and inflation is driving up the prices of most other things too. Make sure you have a savings reserve to cover emergencies and that every dollar doesn’t go to your down payment and your monthly mortgage payments.”

Home sellers should also consider the limits that higher mortgage rates have on buyers’ budgets. There may be ways for sellers to help buyers achieve an affordable housing payment without having to significantly reduce the price of the home.

“If you need to sell now, be open to negotiation, contact the buyer’s agent, and work with the buyer to get their ideal monthly mortgage payment,” says Marr. “There may be concessions that will make the home you’re selling – and the price you want – attractive to both parties. For example, sellers may consider paying closing costs and/or helping the buyer reduce the mortgage rate.”

Additionally, Marr adds that demand could return sooner than expected if buyers “get used to higher rates.” If rates fall to 5% over the next few months, this could encourage some buyers to return to the market. For sellers who are ready to cash in, it may be beneficial to wait a little longer before listing their home.

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Every mother is CFO, learned basic lessons from her : Bandhan Bank MD & CEO https://agapesgr.org/every-mother-is-cfo-learned-basic-lessons-from-her-bandhan-bank-md-ceo/ Sat, 29 Oct 2022 08:10:35 +0000 https://agapesgr.org/every-mother-is-cfo-learned-basic-lessons-from-her-bandhan-bank-md-ceo/ The story begins when Chandra Shekhar Ghosh witnessed a pawnbroker giving 500 rupees to a vegetable seller in a local market and pocketing an interest amount of 5 rupees in advance. Annoyed by this huge interest rate of 1% per day, Ghosh asked the trader why he was taking money at such a high rate. […]]]>

The story begins when Chandra Shekhar Ghosh witnessed a pawnbroker giving 500 rupees to a vegetable seller in a local market and pocketing an interest amount of 5 rupees in advance. Annoyed by this huge interest rate of 1% per day, Ghosh asked the trader why he was taking money at such a high rate. The answer opened his eyes. “What is the alternative?” asked the seller. “No institution lends me Rs 500 or Rs 1,000. The lender gives it to me at my place of work and also collects it at my place of work. I don’t have to travel. No signature is required. Also no guarantor,” the seller was perfectly happy with the arrangement.

This is what Chandra Shekhar Ghosh took away from the meeting – why not offer a door-to-door service for small loans at a much lower interest rate.

In a conversation with Business Today’s Global Editor, Udayan Mukherjee, the Managing Director and CEO of Bandhan Bank revealed that this and the motto “Small is Beautiful, Big is Necessary” was what inspired him to do it big. He had to think big to have an impact on society.

According to Ghosh, his microcredit operation depended entirely on bank funding. “I tried to reduce the rates, but the cost was too high. I was told that I could not attract low cost deposits without a banking license. When the opportunity came for one, I applied and got one,” Ghosh says. He adds that the Bank now has operations in all 34 states and that UTs and deposits have allowed it to reduce the lending rate to its microcredit clients to as low as 4%.

‘POOR WHO PAY ON TIME’

The Managing Director and CEO of Bandhan Bank insists that the economic vulnerability of its clientele does not make them high risk. “For the whole 22 years we served them, before the pandemic, until 2020, I wrote off just Rs 68 crore. We faced all sorts of crises but I only lost Rs 68 crore,” reveals Ghosh. He told Udayan, “I trust these people will return the money. Sometimes they may want extra time. They say we have been with you for 10-15 years, give us time, we will return the money to you. After all, there is a logic to this too. Ghosh said, “What is their alternative? Are they going to go to loan sharks and pay 10% a month? I have always believed in this customer segment. I’m not the least bit worried.

The head of Bandhan Bank fondly recalls the stories of enterprising women from West Bengal and Chhattisgarh who took the leap and are now reaping the rewards of years of hard work and cheap finance.

HUMBLE BEGINNINGS, HUMBLE LESSONS

Chandra Shekhar Ghosh started out working in her father’s small candy store. It was there that he learned his first big lesson in finance. “My dad put me in the store to check on customers who were eating and not paying properly. It helped me learn that supervision is the best way to fund,” Ghosh recalls with a laugh, adding that he learned the secret of “supervised credit” in the workshop. This includes weekly supervision, loan collection and monitoring.

The second lesson he attributes to his mother. “All mothers are CFOs, but they are not CAs. Especially in families where income is lower than demands. It’s the mother who has to juggle finances to meet everyone’s demand and meet their basic needs,” says Ghosh. He reveals that he learned the basic lessons of finance from the lady of his childhood home.

GOOD BUSINESS SENSE

Contrary to what many might think, the CEO of Bandhan Bank insists that serving the bottom rung of society makes perfect business sense. “People who take out small loans see their income increase and their lifestyle change. Their ticket size and demands are also increasing. They come back to us for larger loans. This helps us diversify products and mitigate risk across geographies,” says Chandra Shekhar Ghosh.

Also Read: Bandhan Financial Holdings Gets RBI Approval to Invest in IDFC AMC, IDFC TCL

Also read: ‘You don’t become Narendra Modi in a day’: Sourav Ganguly becomes Bandhan Bank brand ambassador

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Why office loans are rare and far between – Commercial Property Executive https://agapesgr.org/why-office-loans-are-rare-and-far-between-commercial-property-executive/ Wed, 26 Oct 2022 21:32:26 +0000 https://agapesgr.org/why-office-loans-are-rare-and-far-between-commercial-property-executive/ Lending for new office construction and acquisitions has all but disappeared in recent months. Ongoing financings are often for recently built properties in high growth markets or sub-markets. And those lucky enough to receive financing should expect tighter underwriting and a higher cost of debt. Brad Zampa “The appetite and desire for office finance as […]]]>

Lending for new office construction and acquisitions has all but disappeared in recent months. Ongoing financings are often for recently built properties in high growth markets or sub-markets. And those lucky enough to receive financing should expect tighter underwriting and a higher cost of debt.

Brad Zampa

“The appetite and desire for office finance as a product type has been a 180-degree shift since the second quarter of 2022,” said Brad Zampa, executive vice president of the CBRE San Francisco Capital Markets team specializing in debt and structured finance. “Uncertainty surrounding the return to office, interest rate hikes, lack of tenant demand and massive negative absorption ultimately caused liquidity to almost completely dry up.”

During the first half of the year, CBRE financed value-added and stable office assets and portfolios, but the market is now almost non-existent.

“We marketed a vacant office financing in the third quarter and only received three offers with spreads two to three times higher than similar deals six months prior,” he said.

Lenders are reducing leverage across the board, and rising interest rates have tested underwriting, particularly with respect to exit debt service criteria, which may still reduce leverage, Zampa said: “Lenders are just as focused on funding a lower overall last dollar. basis and reducing interest-only periods, preferring amortization to speed up repayments.

The Raleigh Exchange in Raleigh, North Carolina, where DeWitt Carolinas, Inc., recently received funding for 1000 Social, the first office tower. Rendered courtesy of DeWitt Carolinas Inc.

Beyond the economy

All property types are experiencing some liquidity disruption due to the impacts of macroeconomic conditions on financial markets. But the problem for offices is larger and potentially more long-lasting, according to Justin Kennedy, co-founder and managing partner of 3650 REIT.

justin kennedy

“We are certainly not dealing with an excess of new supply built in recent years, which has been the fundamental problem of past crises. said Kennedy, whose Miami-based investment firm creates and manages portfolio loans for relationship borrowers. “This is clearly a ‘demand shock’ and it’s one that’s not even close to playing out yet.”

According Newmark National Office Market in Q2 2022 report, there were 10.5 million square feet of new office deliveries in the second quarter, compared to 12 million square feet in the second quarter of 2021. Office space under construction also fell year-over-year , from 87.5 million square feet in the second quarter of 2021 to 75.8 million square feet. feet in Q2 2022.

In times of recession, office and retail tenants are reluctant to make new office rental commitments. But there is another force at play in the office market.

“Today we are seeing a setback because people don’t want to go to the office anymore,” he said.

For the first 12 months post-pandemic through the summer of 2021, decent funding was available for good offices assets, noted Keith Largay, senior managing director, co-head, Midwest Capital Markets at JLL.

Jamie Woodwell

“What started to change in the second half of last year, and really came into 2022, is that there’s just huge uncertainty about demand and what the characteristics of the demand in the office sector,” said Largay.

According to Jamie Woodwell, vice president of research at the Mortgage Bankers Association, office building starts in the second quarter were down 11% year over year, compared to a 24% increase for multi-family buildings. and 3% for industrial buildings. Retail and hospitality loans rebounded from low levels, while offices continued to lag.

The MBA updated its baseline forecast at the end of July to reflect an anticipated slowdown in overall lending in the second half of the year. MBA expects total commercial and multifamily borrowing and mortgages to fall to $733 billion in 2022, down 18% from $891 billion in 2021.

Woodwell did not have estimates for office-only loans. If the economy went into recession, however, commercial and multifamily borrowing and lending would likely be even more constrained in 2023, he said.

Close a deal

Despite volatility in debt markets, in late September, DeWitt Carolinas secured a $139 million construction loan from alternative lender ACORE Capital for “1000 Social,” the first office tower of The Exchange Raleigh, a project $1 billion, 40-acre mixed-use property in Raleigh, NC Avison Young arranged the financing. The project will eventually include two 12-story office towers totaling 330,000 square feet of Class A office space.

Ed Soccorso

“While there are fewer lenders willing to fund new projects right now, we have strong relationships and a great balance sheet, which always makes things easier on the financing side,” Soccorso said.

He also cited three other factors in favor of the company: 1000 Social is part of the master-planned mixed-use community The Exchange Raleigh has generated a lot of interest; Raleigh continues to be an incredibly attractive market: and DeWitt Carolinas has a significant equity commitment to the project. Once built, the project will include 790,000 square feet of Class A office space; 1,275 residential units; 300 hotel rooms; and 125,000 square feet of retail and restaurant space.

Mixed-use developments also help mitigate a lender’s exposure with diversified products and diversified revenue streams. For office projects only, the flight to quality is a reality and the more recent the building, the more likely the borrower is to obtain financing for the construction or acquisition.

For the few office construction deals underway, tenant pre-lease credit is the starting point for lenders, Kennedy noted.

Source: Newmark National Office Market Report 2Q22

“From there, it becomes how special your location and gear story is,” Kennedy said. “Should there be an element of recourse? If we were dealing with a bank, yes. A debt fund? If the story is good enough, I think not. It will all depend on how clearly “specialty” can be defined as the demand for space in that particular area. »

3650 REIT has not provided an office construction loan since last year, when it financed a property in Houston’s River Oaks district, Kennedy said. The company recently bid on an office building contract in Miami, but its pricing wasn’t aggressive enough to secure the deal. Sponsors are always looking for the right deal.

“If someone came up with a building that had a credit tenant, was in a special location, and we had good confidence about a lease for the rest of the space, I think we would still look into it. “Kennedy said. “It would definitely be a lot more expensive than last year, but we would still look at it.”

Sell ​​or keep?

Investors nearing the end of their business plans must decide whether to sell or hold their assets longer. Largay expects a good number to sell because while the cost of capital will hurt their prices, they know that won’t change in the next 12-18 months or 24 months and, if they wait , they will also have a lower average lease term. Meanwhile, closed-end funds can sell if they run out of extensions on their fund.

Keith Largay

JLL closed in September the sale of an office property in the Dallas market for a four-year-old Class A building, 80% leased. While the owner of 3400 at CityLine in Richardson, Texas could have held the asset for another year or two, adding more value and selling at a better time in the market, they decided it was the right time from a portfolio perspective to sell.

Largay said the buyer, who used loan funds to finance the acquisition, was willing to accept the risk of continuing to lease the building because it was a high-quality building purchased from a lower cost than replacement with good weighted average lease term in a growing market and good submarket.

He said many debt funds are ready to lend on the desk if there are quality real estate demand fundamentals.

“Where they are challenged is that all these debt funds are self-multiplying,” Largay said. “Historically, the main source of leverage has been money banks. Banks in currency centers have significantly reduced their home lending due to regulatory requirements. »

With banks reducing their leverage on all types of assets, many debt funds have to fund their positions with smaller regional banks. Lower internal leverage drives up their cost of capital, which they pass on to borrowers with higher spreads.

Insurance companies and office

Tony Kaufman

Tony Kaufmann, director of the San Francisco office of Gantry, Inc., the largest independent commercial mortgage bank in the United States, said life insurance companies are still considering office offerings, especially those with high quality properties and strong market fundamentals, but the leverage will be lower and rates will be higher. For Gantry, life insurance companies have provided both the largest loan volume and value so far this year.

“I think one of the things that life insurance companies benefit from and why they continue to view office assets selectively is that they are inherently conservative lenders,” Kaufman said. “They are mostly all non-recourse lenders.”

CMBS is still a good source of cash for office assets, Largay said, but activity has fallen due to pricing, which was 6% in September and could rise depending on how interest rates move. interest. For borrowers willing to pay CMBS rates, the market is functional and the debt is available.

In addition to CMBS lenders and some life insurance companies, experts report that some regional banks, credit unions and some unleveraged debt funds are still active in stabilized office deals, but underwriting will be cautious. due to interest rate increases and continued leverage.

“It’s not entirely predictable where we’re headed,” Largay said. “While there is hopefully some upward momentum in cap rates, there will be a bit more success with deals that are shaping up better.”

Read the November 2022 issue of CPE.

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Paying cash for your home is a bad idea for these 4 reasons https://agapesgr.org/paying-cash-for-your-home-is-a-bad-idea-for-these-4-reasons/ Sun, 23 Oct 2022 18:00:30 +0000 https://agapesgr.org/paying-cash-for-your-home-is-a-bad-idea-for-these-4-reasons/ Image source: Getty Images It could get you on the property ladder, but at what cost? Key points As mortgage rates soar, more and more people are buying cash. Paying cash for a home locks up a lot of cash in an asset that is not liquid. It’s wiser to put down a solid down […]]]>

Image source: Getty Images

It could get you on the property ladder, but at what cost?


Key points

  • As mortgage rates soar, more and more people are buying cash.
  • Paying cash for a home locks up a lot of cash in an asset that is not liquid.
  • It’s wiser to put down a solid down payment and take out a mortgage, even if you end up refinancing when rates drop.

After rock-bottom interest rates during the first phase of the COVID-19 pandemic, mortgage chickens have finally come home to roost. In October 2021, the average US mortgage interest rate for a 30-year fixed rate mortgage was just 2.99%. As of this writing, it’s 6.66%. Ouch. With such an increase, combined with extreme competition in many housing markets, as well as a shortage of homes available to anyone who wants to buy them, it is no wonder that many people are bidding for cash on a house. Is it a good idea to give up taking out a mortgage and buy cash (if you can afford it)? Maybe not.

1. Homes are not a liquid asset

While the mainstream wisdom in this country states that home ownership is the only key to wealth (spoiler alert: it’s not the only way), homes aren’t a liquid asset like cash in a savings account or even an investment account. A liquid asset is something you own that can easily and quickly be converted into cash. A home you own does not fall under this designation because of all the hurdles you would have to jump through to sell it. If you had $300,000 in cash and spent all or even most of it buying a house, and then had an emergency where you needed a large sum of money, you would be really in a difficult situation. You can try to sell your house, but there is no guarantee that you will be able to find a qualified buyer quickly. And if you did, you’d still need to wait for the sale to close if your buyer used a mortgage to purchase your home, which would likely take 30-45 days.

2. You may not have money for repairs…

Another problem with paying cash for a home is that you may find yourself unable to pay for repairs. Ideally, you don’t buy a home (cash or otherwise) without having a home inspection done. However, a home inspection will not reveal everything. You might move into your house and after a few weeks or months have to replace your air conditioner or water heater. If you paid cash for your home and found yourself without solid savings, you may have to go into debt to finance expensive repairs.

3. …Or renovations

If you tie up all your money on buying your home, you could find yourself with no money to undertake fun renovations. Maybe your new house has good bones, but the kitchen is a bit old-fashioned and you really like to cook and entertain. You may have to wait a bit and save some money to pay for a kitchen renovation. It’s not a tragedy, of course, but it might be a little disappointing if you’ve rented houses all your adult life and were thrilled to finally make your own home the perfect home for you.

4. You may need to pay

If you’re determined to buy a house with cash and avoid a high mortgage interest rate, you may have to settle for the house you can afford with cash. While it’s a bad idea to live beyond your means and try to buy more homes than you can afford, you may be able to buy a more expensive home if you get a mortgage. If your cash reserves are $200,000, but a mortgage calculator shows you can comfortably afford a $300,000 home with a mortgage, based on your income and other bills, you risk missing out on the opportunity to buy something you’ll really like for more money.

What to do instead

Buying a house with a mortgage is certainly not a tragedy; even billionaire investor Warren Buffett is a fan of the traditional 30-year fixed-rate mortgage. And if the thought of being stuck with a mortgage payment for 30 years is too much to bear, you can opt for a 15-year mortgage or go with a mortgage lender that offers even more flexibility with loan terms. Although a 20% down payment is recommended, if you have plenty of cash, you can make a larger down payment without tying up all of your money in buying your home. In fact, making a bigger down payment will make you a more attractive buyer to both home sellers and mortgage lenders. And even if you’re stuck with a higher interest rate than you wanted, you can refinance when rates come back down.

Check out: We ranked this company as the best overall mortgage lender in our Best-of 2022 awards

More: Our picks for the best FHA mortgage lenders

It’s been a tough year for budding homebuyers, and while it might seem like a good idea to buy cash if you can afford it, these reasons should give you pause.

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CCI approves Carlyle and Advent Groups investment proposals in Yes Bank https://agapesgr.org/cci-approves-carlyle-and-advent-groups-investment-proposals-in-yes-bank/ Thu, 20 Oct 2022 17:00:17 +0000 https://agapesgr.org/cci-approves-carlyle-and-advent-groups-investment-proposals-in-yes-bank/ The Competition Commission of India (CCI) has given the green light to CA Basque Investments, part of the Carlyle Group, and Verventa Holdings, a subsidiary of funds managed by Advent, to acquire up to 10% each of the total paid-in private lender capital YES Bank. Approval of these two combinations would pave the way for […]]]>

The Competition Commission of India (CCI) has given the green light to CA Basque Investments, part of the Carlyle Group, and Verventa Holdings, a subsidiary of funds managed by Advent, to acquire up to 10% each of the total paid-in private lender capital YES Bank.

Approval of these two combinations would pave the way for YES Bank to sell securities worth ₹8,898 crore to global private equity players Carlyle and Advent Groups. (each being authorized to take up to 10% participation).

It should be recalled that the board of directors of Yes Bank in July this year decided to issue more than 369.61 crore shares and 256.75 crore warrants. These securities will be issued on a preferential basis for a total consideration of ₹8,898.47 crore, according to a regulatory filing in July 2022.

CA Basque Investments (Acquirer) is a newly formed special purpose vehicle (incorporated in the Republic of Mauritius) and is wholly owned by CA Marans Investments (incorporated in the Republic of Mauritius), which is ultimately controlled by the funds managed by the affiliates of The Carlyle Group Inc.

The acquirer is an investment holding company and has no business activities in India.

The Carlyle Group Inc. is a global investment firm that manages funds that invest globally in three investment disciplines: (a) global private equity (including private equity funds, real estate and natural resources); (b) aggregate credit (including liquid credit, illiquid credit and real asset credit); and (c) global investment solutions (private equity funds of funds program, which includes primary funds, secondary and related co-investment activities, pooled funds and separately managed accounts).

Verventa Holdings Ltd (the acquirer), an investment holding company, does not carry on any business in India.

POLYESTER CONFIDENCE

In the meantime, CCI has approved the acquisition of certain businesses of Shubhalakshmi Polyesters Limited and Shubhlaxmi Polytex Limited by Reliance Polyester Limited (Acquirer)

The proposed combination contemplates the acquisition by Reliance Polyester Limited (the Acquirer) of the trading businesses of Shubhalakshmi Polyesters Limited (SPL) and Shubhlaxmi Polytex Limited (SPTex) relating to the manufacture of polyester products/yarns as a going concern on the basis of a downward sale for a fixed consideration

The buyer does not currently carry out any commercial activity. However, after the closing of the proposed transaction, it will be mainly engaged in the production and supply of certain petrochemical products such as polyester staple fiber (PSF) and polyethylene terephthalate chips (Chips) as well as different types of yarns. polyester. The buyer belongs to the RIL group (which is one of the producers of polyester fibers and polyester yarns in India).

SPL is engaged in the production and supply of, among others, the following polyester products in India: (i) PSF; (ii) partially oriented yarn (POY); (iii) drawn textured yarn/polyester textured yarn (DTY or PTY); (iv) fully drawn yarn (FDY); and (e) Tokens. SPL also exports polyester products to over 35 countries including the United States of America, Canada, Australia, Ethiopia, Peru, Chile, Colombia, Korea, Vietnam and Russia. .

SPTex is engaged in the production and supply of DTY in India. SPTex also exports DTY to other countries including United States of America, Canada, Australia, Ethiopia, Peru, Chile, Colombia, Korea, Vietnam and Russia.

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View Current Mortgage Refinance Rates https://agapesgr.org/view-current-mortgage-refinance-rates/ Tue, 18 Oct 2022 14:48:50 +0000 https://agapesgr.org/view-current-mortgage-refinance-rates/ Many businesses featured on Money advertise with us. The opinions are our own, but the compensation and extensive research determines where and how businesses can appear. Learn more about how we earn money. Historically, refinancing your mortgage has been an effective method of putting you in a better financial position. You could lower your monthly […]]]>

Many businesses featured on Money advertise with us. The opinions are our own, but the compensation and
extensive research determines where and how businesses can appear. Learn more about how we earn money.

Historically, refinancing your mortgage has been an effective method of putting you in a better financial position. You could lower your monthly payments, save on long-term interest, and potentially pay off your mortgage sooner.

As of this writing, however, mortgage interest rates are the highest they’ve been in decades. While now may not be the best time to think about a refi, things like interest rates and inflation have historically proven to be somewhat cyclical. With that in mind, preparation is key to making the right choice once things have calmed down. If you’ve thought about refinancing, but are apprehensive due to current market conditions, be sure to read on to better understand refinancing as a concept, and bookmark this page for frequent reference. the latest refi rates.

With that in mind, let’s take a look at the most recent mortgage refinance rates and dig a little deeper into the subject of refinancing.

What are the current mortgage refinance rates?

Conventional mortgage refinance rate

From October 11, 2022 to October 17, 2022

Product Interest rate
Fixed 15 years 6.96%
Fixed 30 years 7.93%

FHA Loan Mortgage Refinance Rates

From October 11, 2022 to October 17, 2022

Product Interest rate
FHA fixed 30 years 7.54%

VA Loan Refinance Rates

From October 11, 2022 to October 17, 2022

Product Interest rate
Fixed VA 30 years 7.56%

Jumbo Loan Mortgage Refinance Rates

From October 11, 2022 to October 17, 2022

Product Interest rate
Jumbo fixed 15 years 6.2%
Jumbo fixed 30 years 6.24%

What is Mortgage Refinancing?

Refinancing a mortgage means replacing your existing mortgage with a new one. Your interest rate, monthly payment, and loan term will all change. There are several reasons you might want to refinance, such as shortening your loan term, lowering your monthly payment, or saving on interest. But the goal is always to improve your financial situation.

Advantages and disadvantages of mortgage refinancing

There are several points to consider with each mortgage product. There is no “one size fits all” product, and refinancing may or may not be the best option for you. To help you decide, here are some pros and cons of refinancing your mortgage.

  • You could lock in a lower interest rate than you originally had, which would lower your monthly payment.
  • If the value of your home has increased, refinancing could be a good way to realize the equity in your home and get rid of private mortgage insurance payments.
  • You can also use a refi to consolidate debt or make improvements to your home.
  • You can refinance to switch from an adjustable rate mortgage (ARM) to a fixed interest rate if market conditions have turned unfavorable.
  • When you refinance, keep in mind that there will be closing costs, just like when you first closed your mortgage.
  • While there is such a thing as refinancing with no closing costs, know that closing costs are not going away. Instead, they’re simply rolled into your loan balance, making your payments higher than if you had paid the closing costs out of pocket.
  • Unless you refinance for a shorter term, you will add more years to your payments. It’s still possible to save money in the long run by doing this, but resetting the clock to start a new term on day one may not appeal to you.
  • Just because you’re refinancing doesn’t mean the process will be faster than when you bought your home. The closing process could take just as long and be just as stressful.

Mortgage Refinance FAQs

What types of refinancing are available?

Several refinancing options are available, depending on what you are looking to accomplish. You should consult with your mortgage lender to see which best suits your needs.

Price and duration

This is the most common type of refi. With this option, you leave your loan balance alone and aim for a lower interest rate, shorter term, or both. You can also use this option to switch from an adjustable rate mortgage to a fixed rate mortgage. Keep in mind that you need to set aside money for closing costs and that you will need to have your property reassessed.

Cash-out refi

With a withdrawal refi, you have the opportunity to tap into the equity in your home and withdraw cash. This type of refi will result in a higher balance, but you can use the money to pay off other debts or make home improvements, which can, in turn, increase the value of your home and, by extension, your net worth.

No closing costs

Some lenders offer this option, but as stated earlier, the name is a bit misleading. There are still closing costs, but they are lumped into the loan balance, making the monthly payment higher than if you paid the closing costs up front. This is available as an option on Rate and Term or Cash-Out refinance loans.

Refi collection

This option allows you to make a lump sum payment on your balance as part of the refinance process, thereby reducing the balance of the new loan.

Streamline

This allows you to refinance an FHA or VA loan with limited documentation. Appraisals are generally not required and lenders may also waive employment verification.

When is refinancing worth it?

People refinance for different reasons. The deceptively simple answer is that refinancing is worth it when it makes sense. You need to take the time to work out the numbers based on what you want to accomplish.

For example, if your ARM’s fixed period has run out and you’ve noticed interest rates rising, you might want to refinance to lock in a stable rate.

Another thing to consider is your break-even point, which is how long it takes to recoup the closing costs of your refi. The Consumer Finance Protection Bureau states in its home loan toolkit that a good rule of thumb for a breakeven point is two years. That is to say, in 2 years should have recouped the closing costs of your refi with the monthly savings that represents.

If you are refinancing a shorter term loan, the monthly savings will not be visible to you, as your payment will be higher. One thing you can do to estimate your break-even point is to estimate how much interest you’ll save by refinancing a shorter-term loan. Then divide this interest by the total number of months of the new loan (for example, 180 months for a 15-year loan). The number you get is the “monthly savings” for the purposes of this exercise. Then divide your closing costs by your estimated monthly savings to find your break-even point.

There are many scenarios you could find yourself in, but the fact is that you need to take the time to consider whether a refi will put you in a better financial position than the one you are in now.

How can I find the best mortgage refinance rates?

You will need to compare different lenders to get a personalized rate as they may vary from lender to lender. You may consider comparing several different lenders to get an idea of ​​which one is best for you.

What makes our data different?

Money’s Daily Mortgage Rates show the average rate offered by over 8,000 lenders across the United States over the past 7 days. Our rates reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. These rates were offered to people depositing 20% ​​deposit and include discount points.

Disclaimer: We try to keep our information up to date and accurate. However, interest rates are subject to market fluctuations and vary depending on your qualifications. Calculator results assume a good credit rating and take regional averages into account; your actual interest rate may differ. Calculator results are for educational and informational purposes only and are not guaranteed. You should consult a licensed financial professional before making personal financial decisions.

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