Buying a home for the first time can be an intimidating, and at times scary process. The current COVID 19 pandemic has only made this process seem more stressful. However, there are a few basic tips and tricks, as well as online resources you can utilize, which will make buying a home for the first time a more approachable and pleasant experience, as it should be. Please see below 22 tips for a seamless first home purchase.Read More
Credit scores heavily influence the process for the mortgage application. A higher credit score can help you lock in lower interest rates and provide lower monthly mortgage payments, which can potentially save you tens of thousands of dollars over the life of a 30-year fixed rate mortgage. A good credit score represents your dependability as a borrower. They are utilized by mortgage lenders to calculate the riskiness of lending to a borrower. While low credit scores can jeopardize your qualification for a loan or lead to higher interest rates, high credit scores equate to lower risks for defaults on loans and lower interest rates. As a result, the borrower can get more house (higher purchase price), or a lower monthly payment on a lower priced home. Because of credit scores’ influence on the interest rates set for borrowers, it’s valuable to look into improving it as much as possible before your mortgage application. You don’t want a low credit score to jeopardize your ability to take advantage of the current low interest rates in 2020. It's also important to know that the credit system isn’t perfect and may not reflect perfectly your willingness or ability to repay a debt.Read More
Among speculation centered on long-term worries about the effects of COVID-19 shutdowns on the future of the United States economy, the Federal Reserve has committed to keeping interest rates low to encourage borrowing and stimulate the economy. Compared to last year (2019), mortgage rates are already remarkably lower, reaching below 3.3% for a conventional 30-year fixed mortgage. What does this mean for the mortgage industry and how can the average borrower actually benefit off of these record low mortgage rates?Read More
Bridging the Gap: Democratization in Home Purchasing Through Innovation in Mortgage Technology
America is increasingly becoming a more diverse country. The majority of the population will soon comprise a lionshare of minorities. However, despite their significant presence, many sectors of the minority population are grossly underserved when it comes to financial services, including the home mortgage industry. Even in this day and age, those who are Black and Latinx are less likely to own homes than Whites. While Whites are able to attain mortgages at a rate of 71.9%, Blacks and Latinx are only able to attain mortgages rates almost half that of Whites; 41.3% and 47% respectively. This is because the first two groups have a much harder time getting the conventional mortgages which Whites and Asians have less trouble obtaining. Even after they are approved for conventional loans, Latinx and Black people, on average, pay higher interest rates, and mortgages than Whites and Asians.Read More
It is no secret that the COVID19 pandemic has turned the world as we know it, completely upside down. We now spend a majority of our time working from home, and many in-person interactions that occurred in the workplace, now all occur via Zoom or similar digital engagement. Our lives have become more socially distant, in almost every regard. One silver lining of this pandemic, however, is that it has inadvertently led to increased innovation in the field of mortgage technology. Technological advancements have solved some of the most difficult challenges that Coronavirus has created in the mortgage industry. This is good not only for lenders and lending teams to stay productive, but also borrowers, to keep their re-financing options open and home purchase possible when it's not possible to go to your local lending branch or meet your loan officer for a coffee.
The world changed in 90 days. We went from roaming freely, looking at open houses, walking into our local branch for a mortgage, and many other all-so-routine activities. Then all the sudden it changed. Work from home. School from home. However, our businesses and work must continue. Luckily, we have technology that can help us adapt. Here are 5 trends we have seen with our mortgage lending clients:
Commercial banks are still in trouble. Regulators were initially spurred into action by accusations that six large commercial banks had been hastily processing foreclosures as the housing market collapsed in 2008, using a process known as robosigning that often meant the banks did not adequately check on the accuracy of the documentation. This caused four million homeowners to face foreclosures, and a $10 billion settlement was agreed upon in 2013.
JPMorgan Chase recently was told to pay an additional $48 million to settle remaining issues stemming from missteps in its handling of mortgage servicing accounts after the crisis. The bank already paid $2 billion in a 2013 settlement with the Office of the Comptroller of the Currency (OCC), but it did not satisfy all the obligations of that earlier settlement. (source: http://nyti.ms/1Wf5BOF)Read More
With large banks dealing with low profit margins, high legal risks, and poor reputation - especially since 2008, alternative mortgage lenders are rising to become the major players in the mortgage industry. Alternative mortgage lenders are non-bank companies without customer deposits. They are a convenient and efficient choice, as they offer mortgage rate transparency and help borrowers to complete the home loan process online.
One type of alternative mortgage lenders are marketplaces and brokers, who help potential borrowers shopping for mortgages find the best mortgage rates. Mortgage marketplaces (like LendingTree, Mortgage Hippo, Zillow, eLoan, Google Compare) generate potential lenders based on their mortgage rate algorithms. The referring marketplace site receives a [lead generation] fee for the rate option you choose, and you then complete the loan process with the lender. There are also many online mortgage brokers that will personally guide you through the home loan selection process. These online mortgage lenders seek to shorten the [albeit onerous] home loan process.
In addition, there are also community based lenders who offer solutions to credit-challenged consumers, as they face fewer government regulations, compared to that of larger mortgage bankers. In addition, credit unions also play a growing role in the mortgage industry. They originated more than 8% of U.S. mortgages in 2015, nearly double their amount in 2010. They are often "relationship based", brining in new types of criteria for their decision process.
According to the Federal Reserve, alternative mortgage lenders now account for almost half (45%) of all home loans. With more options for prospective homeowners to choose from, alternative lenders have the ability to transform the mortgage loan process with faster approvals through online application and document processing. (source: http://bit.ly/1PQw4Qe)
StreamLoan is powering not only the traditional mortgage brokers, but many of these alternative mortgage lending providers - we believe the customer experience should be simple, digital, and mobile regardless of the lender selected. We have a rapid on-boarding process for the lenders, allowing them to go from non-mobile, non-digital, to a completely mobile and digital solution without the heavy lifting of spending millions of dollars and years of IT development time. If this sounds interesting to you - please reach out to us firstname.lastname@example.org
Readers--what are your thoughts about going to an alternative mortgage lender versus a direct lender? We would love to hear your thoughts.Read More
The last few years have offered an extremely friendly interest rate environment. This has encouraged purchasing, refinancing, and more real estate activity. As of late, we have seen the Fed nudge rates higher, which was inevitable at some point, and likely a good thing in the long run. Even with this shift, in rates, new financial opportunities on on the doorstep for homeowners - and for those lenders offering deals to these homeowners. What I found interesting is that roughly half of the tappable equity belongs to borrowers whose first-lien mortgages have current interest rates higher than today’s 30-year rate – making them potential candidates for cash-out refis. This translates to trillions of dollars in equity that can (and will be) tapped. Meanwhile, the other half of tappable equity belongs to borrowers whose first-lien mortgages have current interest rates under 4%. What is shocking, is that 23% of cash-out refi borrowers this last year refinanced into higher base mortgage rate to take advantage of cashing out. This strategy can make sense if there is debt consolidation or some other financial goal to reduce the blended rate of other debt at these lower rates. Just be careful about the rate adjustments on any floating or adjustable rate loan products - that can bite! (source: http://bit.ly/1nfZOfT) We know the pain of shopping for a mortgage product and doing all the paperwork required to get a refinance or HELOC deal done - we are here at StreamLoan to help - and make this process simple for both the lending team and customers. Visit us at www.streamloan.io for more information - and as always, feel free to reach out to us directly. We welcome discussions.Read More