Pros and Cons of Refinancing Your Mortgage Right Now

Since April 1, 2009, roughly 16.2 million American homeowners have refinanced their mortgages, according to the latest Housing Scorecard released by HUD.

But as you may or may not know, there are still millions of homeowners who have not, for one reason or another.

Some may not be eligible, while others may be going through foreclosure or have simply given up on making payments.

[Reasons why you can’t refinance.]

And hey, some just may have procrastinated, or simply aren’t that interested in their mortgage.

For example, Obama hasn’t refinanced his mortgage in seven years, but Bernanke has been all about it in recent years.

If you look at the chart below, you’ll notice that refinancing has been pretty steady since the lull in 2008 (when lending came to a standstill), but it’s still nowhere close to that seen in 2003 when things were bubbling up toward implosion.


Yet, mortgage rates are at all time lows, and continue to fall seemingly every week, month, etc., not that anyone seems to care.

So if you’re on the fence about refinancing, let’s look at a few pros and cons of refinancing now vs. later.

Con: Home Prices Rising

Home prices have been on the rise for a while now, and are expected to keep climbing nationwide.

The Housing Scorecard also noted that rising property values have brought homeowner equity to its highest point since the third quarter of 2008.

That pushed 1.3 million homeowners out of an underwater position. That’s great for those looking to refinance, as it should make it easier.


But higher home prices also make refinancing even more attractive to those with equity because their loan-to-value ratio may fall to a lower threshold, pushing their qualifying mortgage rate even lower.

So for those who believe their home value will keep increasing, pumping the brakes on refinancing might be a good move, especially if you’re right on the cusp of a LTV threshold such as 80%, where you can ditch mortgage insurance.

Pro: Record Low Rates

On the flip side of that argument, one could argue that mortgage rates are at unprecedented levels, and you’d be a fool not to refinance now.

After all, what if mortgage rates tick higher and you “miss your chance” at snagging a 30-year fixed near 3%?

You might kick yourself a few times for missing the boat. And how low can mortgage rates really fall?

Con: Even Lower Rates

Well, the housing pundits have said that month after month, and week after week, only to grab their erasers and pretend they didn’t call a mortgage rate bottom.

I’ll admit that I’ve been one of those people.

Yes, rates are absurdly low, but no, they probably haven’t bottomed. There is still so much uncertainty out there that can push rates even lower.

Europe is still unraveling, and whether there has been much improvement locally is still a big question mark.

With the Fed pledging to buy mortgage securities until the cows come home, waiting could pay off.

Pro: Lower Payments Today

But, the longer you wait to refinance, the more you’ll pay each month in the form of a higher interest rate.

So if you keep riding it out, waiting for that perfect time to refinance, you’re essentially missing out on a lower payment during those months (or years).

Make sure you factor in all that money once you finally make the decision to refinance. The savings could be skewed as a result.

Con: Big Picture Savings

Of course, you might just say, “hey, I might be spending more each month now, but once I get a 2.50% 30-year fixed, I’ll be ahead in no time.”

That could be true, and someone who waits a bit longer could wind up with an even better rate and a lower monthly payment, which could spell bigger savings over the years ahead.

[Locking vs. floating]

After all, refinancing costs money (unless it’s a no cost loan), and serially refinancing isn’t always possible (nor fun), especially if your credit takes a hit or something else makes you ineligible.

Pro: You’re Eligible Now

Speaking of, if you’re eligible now, and the interest rate is dynamite, letting it ride might not be the best move.

What if something does bar your eligibility, such as unemployment, a mindless missed payment that leads to a lower credit score, or simple program changes?

There’s been talk about all types of stuff on the horizon, like a qualified mortgage, which Romney mentioned in the first presidential debate.

You wouldn’t want to be caught out by a future change or misstep, would you?

In summary, you can’t really go wrong by refinancing right now, assuming it saves you money, but yes, waiting could prove to be better.

In any case, take the time to really think it over!


Mortgage Rate History: Check Out These Charts from the Early 1900s

Last updated on February 5th, 2019

Today we’ll take a brief look at some mortgage rate history to gain a little context. It’s always helpful to know what came before so you can better guess what might come after.

Just about everyone knows that mortgage rates hit all-time record lows over the past year. But do you know what mortgage rates were like in the 1900s?

The 30-year fixed averaged 3.31% during the week ending November 21, 2012, its lowest point in history.

Later, the 15-year fixed hit the lowest point ever, sinking to 2.56% during the week ending May 2, 2013.

Freddie Mac’s Mortgage Rate Statistics Started in 1971

historic mortgage rates

  • Most mortgage rate statistics are tied to Freddie Mac’s archive
  • Unfortunately, it only goes back to the year 1971
  • I wanted to drill down a bit deeper to see what things were like
  • Prior to the 70s and earlier on the century to gain more perspective

Both figures above come from Freddie Mac’s Primary Mortgage Market Survey, which only dates back to 1971.

For the record, back in April of 1971, the first month they began tracking 30-year fixed mortgage rates, the national average was 7.31%.

It went as high as 18.45% in October 1981 and as low as 3.31% in November 2012. That’s quite a range.

Note that the graph above charts rates based on their January average of each year, so it appears they don’t exceed 18%.

The 15-year fixed has only been tracked by Freddie Mac since September 1991, when rates averaged 8.69%.  In that same month the 30-year fixed averaged 9.01%.

Anyway, I remember a while back when fixed rates were in the low 4% range that the media was going on about how rates hadn’t been this low since the 1950s.

I never really took the time to see how low rates were back then, but I finally decided to do some digging to get a little more information.

A Little Bit of Mortgage Rate History

  • Mortgage rate history stretches back nearly a century
  • But the best records only go back to the early 1970s
  • The 30-year fixed gained in popularity around the 1950s
  • And rates reached a low around 1945 before hitting new lows in 2012

That brought me to several out-of-print volumes from the National Bureau of Economic Research, which seems to have the best records out there.

Unfortunately, the details are still quite murky at best. You see, back then there were different types of mortgages, not like the ones used today.

While I don’t know when the very first 30-year fixed mortgage was created and issued (someone please tell me), they were believed to become widespread in the 1950s, which is why media references that decade.

Before that time, it was common for entities like commercial banks and life insurance companies to issue short-term balloon mortgages, often with terms as short as three to five years, which would be continually refinanced and never paid off.

These loans were also underwritten at LTV ratios around 50%, meaning it was pretty difficult to get a home loan.

Later, once the Great Depression struck, home prices nosedived and scores of foreclosures flooded the housing market because no one could afford to make large payments on their mortgages, especially if they didn’t have jobs.

Then came FDR’s New Deal, which included the Home Owners’ Loan Corporation (HOLC) and the National Housing Act of 1934, both of which aimed to make housing more affordable.

The HOLC, established in 1933, could explain why long-term fixed-rate mortgages are in existence today.

The purpose of the HOLC was to refinance those old balloon mortgages into long-term, fully amortized loans, with terms typically ranging from 20 to 25 years.

Rates Came Down as Loan Terms and LTVs Increased

  • Homeownership became more affordable over time
  • Thanks to lower interest rates
  • Longer loan terms
  • And higher LTVs (lower down payments)

A year later, the FHA and the Federal Savings and Loan Insurance Corporation were created, and in 1938, Fannie Mae was born. All of these entities essentially expanded credit availability and led to more liberal lending standards.

Over time, mortgage interest rates came down while LTV ratios and loan terms increased, as you can see from the charts below.

Historical Mortgage Rates

early 1900s lending

While it’s hard to get an apples-to-apples comparison of mortgage rates before the advent of the 30-year fixed, the National Bureau of Economic Research does have a chart detailing rates from 1920 to 1956.

From about 1920 until 1934, conventional mortgage rates averaged close to 6%, and then began to decline to a low point of just under 4.5%. This is probably the reference point the media uses when they say rates haven’t been this low in 60 years.

Mortgage Rates in the 1920s to 1950s

  • We see a steady drop in interest rates
  • From around 1935 to 1945
  • Before rates began their ascent
  • Perhaps as the result of World War II ending

early 1900s mortgage rates

However, it’s unclear what types of mortgages these were over this extensive time period, and when the 30-year fixed actually became the standard. But it does provide for a little bit of context.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.


Watch the Holiday Spending If You Plan to Refinance

Well, believe it or not, the holidays are upon us again. It seems like just yesterday I was cursing the fact that I didn’t have an air conditioner, and now I wish I had a better heater. Go figure.

To compound that, I now need to get out (or stay online) and do my holiday shopping. The good news is that family and friends have to do the same thing for me, assuming they actually bother buying me gifts this year.

Anyway, I got to thinking about a possible problem that can arise from aggressive holiday shopping.

If you spend and spend and spend in the next few weeks, make sure you can actually pay for all your purchases.

Otherwise you’ll rack up credit card debt, which can obviously lead to costly finance charges.

Unintended Consequences

We all know credit card debt is bad; after all, the APR on credit cards is sky-high compared to pretty much every other type of loan, especially mortgages.

So you’ll be wasting away money via outrageous finance charges if you don’t pay off your bad gift giving debt.

But worse are the unintended consequences of carrying said debt.

Let’s assume you’ve got a “great plan” to tidy up your finances and finally get around to that refinance once the in-laws are forcibly removed from your home after the holidays.

Come January, you apply for a refinance at your local bank or via an online lender, with grand plans to save tons of money via an über-low mortgage rate.

You know you’ve got a good credit score, a well paying job, and plenty of assets. Heck, you’ve even got a fair amount of home equity, which will make your low-LTV loan bulletproof.

As you’re daydreaming about your stellar borrower profile, the phone rings, and it’s your loan officer.

Remember your awesome credit score? Well, it dropped 30 points, thanks to all that new credit card debt.

Even though you intend to pay it, or even if you paid it, your credit score got hit because your credit utilization spiked and the credit bureaus took notice.

[What mortgage rate can I get with my credit score?]

You’ve Still Got the Green Light

As you begin to panic, your loan officer reassures you, and lets you know that you can still refinance!

There’s just one little catch. The mortgage rate you were quoted when you originally spoke isn’t going to be as low, thanks to that credit score ding.

That 30-point hit was enough to push you into a lower credit score tier, which increased a pricing adjustment, and subsequently, your interest rate.

Sure, you can still refinance. But you’ll have a higher-than-expected monthly mortgage payment, and pay that much more in interest each month.

All because you were reckless with your spending before going out and getting a mortgage.

[The refinance rule of thumb.]

It Could Be Worse

While perhaps a lot less likely, if you go nuts and rack up a ton of holiday debt, buying heart-shaped pendants from Kay Jewelers, it could be enough to kill your loan completely.

Put simply, if the debt is large enough to where the minimum monthly payment pushes your debt-to-income ratio beyond acceptable limits, you could be out of luck.

So think those big purchases through if you’ve got ambitious plans to get a mortgage in the New Year.

After all, you wouldn’t want to miss out on securing one of the lowest rates in history thanks to some cheesy diamond-stud earrings.

Your loved ones should understand. Once the refi is done you can shop to your hearts delight and make up for any unmet expectations.

Tip: When holiday shopping, avoid opening up a store credit card or any other line of credit if you plan to refinance in the near future, as doing so can really knock your credit score out of whack.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.


Mortgage Rate Shopping: 10 Tips to Get a Better Deal

Last updated on December 8th, 2020

Looking for the best mortgage rates? We’ve all heard about the super-low mortgage rates available, but how do you actually get your hands on them?

When it’s all said and done, it never seems to be as low as the bank originally claimed, which can be pretty frustrating or even problematic for your loan closing.

But instead of worrying, let’s try to find solutions so you too can take advantage of these remarkable interest rates.

There are a number of ways to find the best mortgage rates, though a little bit of legwork on your behalf is definitely required.

After all, you’re not buying a TV, you’re buying a home or refinancing an existing, probably large home loan.

best mortgage rate

If you’re not willing to put in the work, you might be disappointed with the rate you receive. But if you are up for the challenge, the savings can make the relatively little time you put in well worth it.

The biggest takeaway is shopping around, since you can’t really determine if a mortgage rate is any good without comparing it to others.

Many prospective and existing homeowners simply gather one quote, typically from a friend or real estate agent’s reference, and then kick themselves later for not seeing what else is out there.

Below are 10 tips aimed at helping you better navigate the shopping experience and ideally save some money.

1. Advertised mortgage rates generally include points and are best-case scenario

You know those mortgage rates you see on TV, hear about on the radio, or see online. Well, most of the time they require you to pay mortgage points.

So if your loan amount is $200,000, and the rate is 3.75% with 1 point, you have to pay $2,000 to get that rate. And there may also be additional lender fees on top of that.

It’s important to understand that you’re not always comparing apples to apples if you look at interest rate alone.

For example, lenders don’t charge the same amount of fees, so clearly rate isn’t the only thing you should look at when shopping.

Additionally, these advertised mortgage rates are typically best-case scenario, meaning they expect you to have a 760+ credit score and a 20% down payment. They also expect the property to be a single-family home that will be your primary residence.

If any of the above are not true, you can expect a much higher mortgage rate than advertised.

Are you showing the lender you deserve the lowest rate, or simply demanding it because you feel entitled to it? Those who actually present the least risk to lenders are the ones with the best chance of securing a great rate.

2. The lowest mortgage rate may not be the best

Most home loan shoppers are probably looking for the lowest interest rate, but at what cost? As noted above, the lowest interest rate may have steep fees and/or require discount points, which will push the APR higher and make the effective rate less desirable.

Be sure you know exactly what is being charged for the rate provided to accurately determine if it’s a good deal. And consider the APR vs. interest rate to accurately gauge the cost of the loan over the full loan term.

Lenders are required to display the APR next to the interest rate so you know how much the rate actually costs. Of course, APR has its limitations, but it’s yet another tool at your disposal to take note of.

3. Compare the costs of the rate offered

Along those same lines, you need to compare the costs of securing the loan at the par rate, versus paying to buy down the rate.

For example, it may be in your best interest to take a slightly higher rate to cover all your closing costs, especially if you’re cash-poor or simply don’t plan on staying in the home very long.

If you won’t be keeping the mortgage for more than a year or two, why pay points and a bunch of closing costs out of pocket. Might as well take a slightly higher rate and pay a tiny bit more each month, then you can get rid of the loan. [See: No cost refinance]

Conversely, if you plan to hunker down in your forever home and can obtain a really low rate, it might make sense to pay the fees out-of-pocket and pay points to lower your rate even more. After all, you’ll enjoy a lower monthly payment as a result for many years to come.

4. Compare different loan types

When comparing pricing, you should also look at different loan types, such as a 30-year vs. 15-year. If it’s a small loan amount, you might be able to refinance to a lower rate and barely raise your monthly payment.

For example, if you’re currently in a 30-year home loan at 6%, dropping the rate to 2.75% on a 15-year fixed won’t bump your mortgage payment up a whole lot. And you’ll save a ton in interest and own the home much sooner, assuming that’s your goal.

And as mentioned, if you only plan to stay in the home for a few years, you can look at lower-rate options, such as the 5/1 ARM, which come with rates that can be much lower than the 30-year fixed. If you’ll be out of there before the loan ever adjusts, why pay for the 30-year fixed?

5. Watch out for bad recommendations

However, don’t overextend yourself just because the bank or broker says you’ll be able to pay off your mortgage in no time at all.

They may recommend something that isn’t really ideal for your situation, so do your research before shopping. You should have a good idea as to what loan program will work best for you, instead of blindly following the loan officer’s opinion.

It’s not uncommon to be pitched an adjustable-rate mortgage when you’re looking for a fixed loan, simply because the ultra-low rate and payment will sound enticing. Or told the 30-year fixed is a no-brainer, even though you plan to move in just a few years.

6. Consider banks, online lenders, credit unions, and brokers

I always recommend that you shop around and compare lenders as much as possible. This means comparing mortgage rates online, calling your local bank, a credit union, and contacting a handful of mortgage brokers.

If you stop at just one or two quotes, you may miss out on a much better opportunity. Put simply, don’t spend more time shopping for your new couch or stainless-steel refrigerator. This is a way bigger deal and deserves a lot more time and energy on your part.

Your mortgage term is probably going to be 30 years, so the decision you make today can affect your wallet for the next 360 months, assuming you hold your loan to term. Even if you don’t, it can affect you for years to come!

7. Research the mortgage companies

Shopping around will require doing some homework about the mortgage companies in question. When comparing their interest rates, also do research about the companies to ensure you’re dealing with a legitimate, reliable lender that can actually get your loan closed.

A low rate is great, but only if it actually funds! There are lenders that consistently get it done, and others that will give you the runaround or bait and switch you, or just fail to make it to the closing table because they don’t know what they’re doing.

Fortunately, there are plenty of readily accessible reviews online that should make this process pretty simple. Just note that results will vary from loan to loan, as no two mortgage loans or borrowers are the same.

You can probably take more chances with a refinance, but if it’s a purchase, you’ll want to ensure you’re working with someone who can close your loan in a timely manner. Otherwise a seemingly good deal could turn bad instantly.

8. Mind your credit scores

Understand that shopping around may require multiple credit pulls. This shouldn’t hurt your credit so long as you shop within a certain period of time. In other words, it’s okay to apply more than once, especially if it leads to a lower mortgage rate.

More importantly, do not apply for any other types of loans before or while shopping for a mortgage. The last thing you’d want is for a meaningless credit card application to take you out of the running completely.

Additionally, don’t go swiping your credit card and racking up lots of debt, as that too can sink your credit score in a hurry. It’s best to just pay cash for things and keep your credit cards untouched before, during, and up until the loan funds.

Without question, your credit score can move your mortgage rate significantly (in both directions), and it’s one of the few things you can actually fully control, so keep a close eye on it. I’d say it’s the most important factor and shouldn’t be taken lightly.

If your credit scores aren’t very good, you might want to work on them for a bit before you apply for a mortgage. It could mean the difference between a bad rate and a good rate, and hundreds or even thousands of dollars.

9. Lock your rate

This is a biggie. Just because you found a good mortgage rate, or were quoted a great rate, doesn’t mean it’s yours.

You still need to lock the rate (if you’re happy with it) and get the confirmation in writing. Without the lock, it’s merely a quote and nothing more. That means it’s subject to change.

The loan also needs to fund. So if you’re dealing with an unreliable lender who promises a low rate, but can’t actually deliver and close the loan, the rate means absolutely nothing.

Again, watch out for the bait and switch where you’re told one thing and offered something entirely different when it comes time to lock.

Either way, know that you can negotiate during the process.  Don’t be afraid to ask for a lower rate if you think you can do better; there’s always room to negotiate mortgage rates!

10. Be patient

Lastly, take your time. This isn’t a decision that should be taken lightly, so do your homework and consult with family, friends, co-workers, and whoever else may have your best interests in mind.

If a company is aggressively asking for your sensitive information, or trying to run your credit report right out of the gate, tell them you’re just looking for a ballpark quote. Don’t ever feel obligated to work with someone, especially if they’re pushy.

You should feel comfortable with the bank or broker in question, and if you don’t, feel free to move on until you find the right fit. Trust your gut.

Also keep an eye on mortgage rates over time so you have a better idea of when to lock. No one knows what the future holds, but if you’re actively engaged, you’ll have a leg up on the competition.

One thing I can say is, on average, mortgage rates tend to be lowest in December, all else being equal.

In summary, be sure to look beyond the mortgage rate itself – while your goal will be to secure the lowest rate possible, you have to factor in the closing costs, your plans with the property/mortgage, and the lender’s ability to close your loan successfully.

Tip: Even if you get it wrong the first time around, you can always look into refinancing your mortgage to lower your current interest rate. You aren’t stuck if you can qualify for another mortgage down the road!


Should You Only Buy a House If You Can Afford a 15-Year Fixed Mortgage Payment?

Posted on June 10th, 2019

I’ve already written at length about the pros and cons of a 15-year fixed mortgage, but some financial experts claim you shouldn’t even buy a home if you can’t afford this shorter-term mortgage option.

You know, guys like Dave Ramsey, and perhaps more reasonable folks like that financial planner you visited recently.

The problem is that many, many Americans simply can’t afford the higher monthly payments tied to a 15-year fixed mortgage, for better or worse.

And that shouldn’t necessarily stop them from purchasing a home.

15-Year Mortgage or Bust?

  • Some financial gurus argue if you can’t afford the 15-year fixed mortgage payment
  • You’re buying too much home or simply shouldn’t be buying
  • But this “rule” is simply too rigid for my liking
  • You can always pay more each month, refinance, or put your cash to use elsewhere

Let’s talk about the rationale behind this theory first to see why it is often suggested.

With a 15-year fixed mortgage, you own your home in, you guessed it, half the time, just a decade and a half, versus the lengthy three decades it takes to pay off a more common 30-year fixed-rate mortgage.

That’s the first big benefit, obviously. Another is you save an absolute ton on interest because the amortization period is cut in half (and the interest rate is lower as well).

So on a $300,000 mortgage, the interest savings are $127,000 over the life of the loan. Yes, you read that right.

You can save a staggering amount of money simply by going with a 15-year fixed instead of the more commonplace 30-year fixed.

Aside from saving a boatload of cash, you also own more of your home a lot faster.

So if you need/want to move out at some point in the near future, you can probably do so with the 15-year mortgage in place.

With the 30-year, you might not accrue enough equity to afford a move-up home, or simply another home in a similar price range.

After five years of on-time mortgage payments, our hypothetical $300,000 mortgage balance is only paid down to around $270,000.

Meanwhile, during that same span the 15-year fixed is left with a balance of just over $214,000.

A homeowner who maybe wisely opted for the 15-year fixed would have over $85,000 in home equity (not to mention any home price appreciation during that time).

That could be plenty for a down payment to move up to a larger home.

The 30-year fixed buyer would only have $30,000 to play with…factor in costs to sell the home and it’s not as awesome as it sounds.

It’s for these reasons that financial gurus will tell borrowers to go 15-year fixed or bust.

The argument is essentially that the 30-year fixed mortgage is a bad deal for homeowners and should be avoided at all costs.

So if you can’t afford the higher payments, don’t buy a house because a 30-year mortgage just shouldn’t exist, and as such, you shouldn’t be a homeowner.

There’s a Reason the 30-Year Mortgage Exists

  • Home prices vary considerably by region
  • In some areas they’re far too expensive for most home buyers to pay them off in 15 years
  • You can also argue that paying off your mortgage isn’t always the best investment
  • Especially when mortgage rates are at or near historic lows

The problem with the argument above is that most home buyers probably can’t go with the 15-year fixed because in reality it’s unaffordable. You can blame high home prices for that.

Sure, in areas of the country where homes regularly sell for $150,000 it might not be a big deal.

The difference in monthly payment could only be a couple hundred bucks.

But in areas where homes sell for much, much more, we’re talking a night and day difference in monthly payment.

The mortgage payment on the 15-year fixed from our example above is around $700 higher, even when factoring in a lower mortgage rate (I chose 3% on the 15-year vs. 3.75% on the 30-year, a reasonable spread).

Many individuals barely qualify for the mortgages they take out, and that’s with the much lower 30-year fixed payment. Adding another $500 or more in monthly outlay probably won’t fly for most.

Does this mean they shouldn’t own homes? Absolutely not. It just means the bank will own most of your home for a lot longer. And that you won’t be as heavily invested in your property.

While it sounds great on paper to throw everything toward the mortgage, a lot can go wrong when you’re in too deep on one investment.

Remember the old “all your eggs in one basket” idiom?

Shouldn’t these same financial gurus be wary of that as well, especially if home equity makes up the overwhelming majority of your personal wealth?

It Can Backfire

  • Imagine a period of declining home prices
  • If you pay off your mortgage in 15 years you might have all your money locked up in your home
  • Whereas the 30-year fixed borrower will have cash for other expenses
  • One could argue that a longer-term mortgage enhances diversification

We all saw what happened a decade ago when the housing market collapsed.

I’m assuming those who made 15-year fixed mortgage payments weren’t too happy that their property values were sliced in half.

The 30-year fixed mortgage folks probably weren’t thrilled either, but at least they could cut their losses or continue to make smaller payments as they assessed the rather dismal situation.

Even in good times, you can get pretty house poor making massive mortgage payments each month if they’re barely affordable.

And you may neglect other, arguably more important investments such as a retirement account or college fund, along with other higher-interest debt.

When it comes down to it, you always have the option to make a larger payment (or extra payments) on a 30-year mortgage.

It’s also possible to refinance into a shorter-term mortgage once you’re in a better position financially, perhaps once you’re a bit older.

So starting out with a 30-year fixed mortgage could be a great strategy for someone sick of renting, which these financial experts probably also advise against.

And there are lots of savvy individuals who recommend putting your extra cash somewhere other than the mortgage.

That’s not to say a 15-year fixed won’t save you a ton of money, or that it’s perhaps a cool rule of thumb when setting out to buy a home.

In a perfect world, it’d be great if we could all afford the 15-year fixed mortgage payment. But that’s just not today’s housing market.

Of course, results will vary based on where in the country you intend to buy. And how much you make. But don’t be discouraged or feel you can’t take part based on mortgage product alone.


There Are Two Ways to Look at Today’s Higher Mortgage Rates: One Good, One Bad

Last updated on February 2nd, 2018

Mortgage rates have been all the rage this year, with new record lows met with equally unprecedented upsurges.

It’s been a rough ride for many of those in the business, along with homeowners looking to refinance or purchase a new property.

But there are two ways of looking at today’s higher rates, and it’s not all bad.

The Monthly Payment Perspective

Most banks and lenders focus on monthly payments. It’s pretty rare to see a lender advertising how much you’ll pay in interest over the term of your loan.

Heck, if banks did flaunt you how much interest you’d be paying them over 30 years, you’d probably walk away from the deal.

But seriously, payment is always king, and for good reason. When you get qualified for a loan, underwriters consider your monthly payment, not how much interest you’ll pay for the next several decades.

They use the interest rate you’ve pre-qualified for to determine your DTI ratio, which has certain limits you must adhere to if you want to get approved.

And so let’s look at mortgage payment for a moment. On the popular 30-year fixed, rates have risen from around 3.5% in May to roughly 4.625% today, depending on your loan scenario.

Obviously, the more risk you present to the bank, the higher your interest rate, and vice versa, but we’ll use those best-case rates for comparison sake.

Last week, the FHFA said the average loan amount for all conforming loans was $278,200 in July, down from $282,400 in June. So again, let’s use $275,000 as a base loan amount.

Plugging in those numbers, the monthly mortgage payment was as low as $1,234.87 in May, and is now closer to $1413.88. That’s a difference of $179.01.

While nearly $200 is nothing to sneeze at, for many homeowners it shouldn’t be a deal breaker in and of itself.

Yes, it means some people won’t qualify any longer if they were on the cusp, but I doubt it’d be a big enough deal for many would-be home buyers to walk away entirely.

The stories in the media about people walking away over a few hundred dollars are probably a bit sensationalistic and few and far between.

Anyway, the monthly payment difference isn’t all that bad, that’s the point.

The Total Interest Due Perspective

As I said above, banks don’t advertise how much interest you’ll pay over the life of the loan. They focus on payment.

And they’ll probably use the same argument I just made to make home buying attractive, even with a substantial interest rate increase.

But using the same numbers we relied upon in the prior example, the average homeowner would pay an extra $64,443.60 in interest today as opposed to back in May.

If banks presented things in terms of interest paid over the life of the loan, many more homeowners would probably be discouraged to buy a home now that rates have ticked higher.

Long story short, $180 extra a month doesn’t sound too bad. Just skip your Starbucks here and there and eat out less often. Maybe drop Showtime.

Conversely, paying an additional $65,000 or so because you couldn’t find a home a few months ago is a pretty big sticker shock, and could make buyers think twice.

Of course, it all depends on how long you plan to keep your loan. Most homeowners don’t actually stay in the same loan or home for more than 10 years, so perhaps payment should be the chief concern.

It even makes the argument for an ARM a lot more attractive, and those are still being offered in the low-3% range.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.


Marriage and Mortgage May Not Mix

Marriage or Mortgage?

The premise of the new Netflix show “Marriage or Mortgage” is simple. It pits a wedding planner against a real estate agent.

The prize, if you want to call it that, is getting the spouses-to-be to go in one direction over the other.

In this case, an over-the-top wedding versus a dream house. Because they can’t possibly have both, at least not on their budget.

While this might make for great reality television, it is a serious issue many young couples face, especially with home prices a lot higher than they’ve been.

At the same time, the pressure to throw an incredible wedding has never been greater, perhaps thanks to Instagram and social media. It’s like a weird competition no one really wins.

It’s Okay to Rent and Be Married, Honest

  • There’s nothing wrong with renting at any time in your life
  • You don’t need to own a home just because you’re married or engaged
  • But if you do plan on starting a family in the near future it might be smart to put down roots somewhere
  • This will provide added stability and perhaps more space for additional occupants

So you’re planning on getting married this summer, and you just have to find a perfect house to call your own before that magical day. Or very soon thereafter.

There’s no possible way you could continue to live in an apartment and rent once you’re married! That just won’t do. Married people are supposed to be homeowners, right?

Not so fast. It’s a big financial decision that shouldn’t necessarily take place while you’ve got a lot of other major life changing events in the works.

Why do newlyweds and newlyweds-to-be have this must-own mentality? Is it the seriousness of marriage, or the need for a solid foundation to begin raising a family?

While I get the latter part to some extent, one shouldn’t buy a home simply because of a recent or upcoming wedding.

You should buy a home when you have given it a lot of thought, done your due diligence, and are financially secure to go through with the purchase.

Generally, this means having enough money for a down payment, closing costs, and reserves, factoring in any wedding day costs.

Married or not, one must take the time to determine if homeownership is for them. Guess what? It’s not for everyone.

We don’t all want the responsibility of owning a home or condo. It can be a lot of work, hard on the finances, and super stressful.

There’s also the question of home prices, which are pretty sky-high at the moment. One should always take the time to consider the current state of the real estate market too.

Obviously, there will be people marrying at the height of the market and at market lows. So the results will always vary.

That latter group might have a great reason to buy a home, whereas the former group could make an ill-timed decision and add a lot of uncertainty and stress to a new marriage.

[What’s the Best Mortgage for First Time Buyers?]

There Shouldn’t Ever Be a Rush to Buy a Home

  • Plenty of married couples rent until finding their forever home
  • A wedding can be hard on a couple’s finances and their collective psyche
  • As can the marriage itself as two individuals learn to commingle assets for the very first time
  • So waiting to get all your ducks in a row can actually pay off and reduce stress

All I see these days are new couples rushing into home purchases because they’re engaged or newly married.

It appears to be the next logical step in life, but forcing the issue just because everyone else is doing it isn’t necessarily the right decision.

Sure, kids are often not too far out once you tie the knot, assuming you want them, but that doesn’t mean you just take another plunge.

Give it some serious thought, just as you did your wedding (hopefully). Like marriage, it’s a major commitment, not a hasty decision.

For me, this seems like a huge layer of stress to pile on top of an already stressful period.

Buying a home is no trivial matter, and could lead to arguing and fighting, which is no way to start a marriage, especially during a pandemic!

Additionally, you’ll probably have lots of expenses related to the wedding and subsequent honeymoon, so it might be tough to come up with the minimum down payment on the home purchase.

This could put you in a bad position, or force you to attempt to buy a home with nothing down.

Sure, it could be an option to buy with little set aside in the bank, but at what price?

Expect a higher mortgage rate, higher monthly payment, and perhaps a less competitive offer relative to others willing to put more down in the case of a bidding war.

Start the Home Buying Discussion Early

  • Once you’re married (and long before that) the home buying discussion should take place
  • You should include a hard look at your finances and your spouse’s
  • Take the time to determine your housing goals, wants, and needs
  • That way you’re adequately prepared to buy when your dream home comes along

A wise couple should take the time to organize their finances, check and fix their credit if necessary, and do a lot of debt-to-income and valuation homework before even thinking about buying a home.

It doesn’t make sense to rush into the purchase of a home simply because your relationship status changed. They’re two entirely different things.

But it is perfectly sensible (and smart) to begin the conversation as early as possible, just as you would other important decisions like having kids.

This is especially true as you get to know your significant other’s saving and spending habits, and perhaps their not-so-good credit history.

It’s not uncommon for one individual to weigh down the other in that department, which could jeopardize the entire mortgage approval.

Speaking of, start with a mortgage pre-approval before you begin scouring listings and picking out furniture.

You certainly shouldn’t start your marriage off with a rash decision just because it’s the “normal” way of doing things, or because other couples or family members pressure you to buy a home.

Take your time and do it right, whether you’re planning to get married, newly married, or even if marriage isn’t even on the radar.

[What Is a Good Price for a First-Time Home Buyer?]

What About Buying a Home Before Marriage?

  • A common trend these days is buying a home before getting married
  • For some reason it’s easier to commit to a home purchase than another person
  • But the situation can get pretty sticky if the couple decides to go their separate ways
  • Again, you’re making a big commitment either way so give it a lot of thought!

A trend that has emerged in recent years, especially among the Millennial cohort, has been buying a home before marriage.

You can call it progressive or unconventional, or perhaps smart if two people see a good buying opportunity they don’t want to miss.

Some of the advantages to purchasing a home before marriage include having more money for a down payment (since it hasn’t been wasted on a big wedding ceremony).

Or simply buying a home solely because you want to, not because you’re married and feel pressure to do so.

On the other side of the coin, owning a home together before marriage could pressure you to actually get married, even if cracks start to develop in the relationship.

You may feel that you have no choice since you already own a major asset together, and separating it won’t be financially advantageous.

Some may also have personal beliefs that dictate the order of things, which don’t allow a home purchase before marriage.

There are also legal and title issues to consider when two unmarried individuals jointly own real estate or any other asset.

Ultimately, real estate and marriage are very separate things that don’t necessarily need to go hand-in-hand.

Try to look at the big picture. How will the home purchase fit into the larger plan? Is it better to buy now or later and why?

One plus to a post-wedding home purchase is the chance you might get some money as a gift, which could be helpful to cover the down payment and closing costs.

You may just want to let the dust settle before you hire the moving van.

Should Married Couples Live with a Roommate?

married homeowners

Another emerging trend lately has been taking on roommates or boarders to help pay the mortgage bill each month.

It makes a lot of sense if you’ve got spare bedrooms and don’t mind having friends or family members live with you.

Amazingly, this even happens with married couples (I know of at least two firsthand), though I’ve also heard of the arrangement ending fairly quickly, especially once kids enter the picture.

Data parsed by Trulia found that the share of married couples with roommates hit its high in 2012, around the time the housing market was bottoming. It wasn’t far off in 2007 either, when home prices were peaking.

They also found that more expensive housing markets (many on the West Coast) tend to have a higher share of married couples with roommates.

This could be attributed to affordability issues all around, whether it’s an existing homeowner hanging onto their home by supplementing income from another individual.

Or a former homeowner or renter being forced to become a boarder during tough times.

As of 2018, just 3.28% of all U.S. households had a roommate/boarder. It doesn’t sound like much, but it still accounts for some 4.2 million households nationwide.

Among married couples, the rate was a much smaller 0.46%, representing about 280,000 households.

While perhaps not for the faint of heart, it could make housing payments more affordable, especially as home prices hit new all-time highs in the more expensive markets nationwide.

In the end, a smart couple that does their homework might not need to make the very hard decision between a marriage and a mortgage, and can actually have the best of both worlds.

Those who do may also set themselves up for greater success in their marriage, which could be the recipe to long, happy life together.

Remember, a wedding typically lasts for a few hours, while homeownership can go on for decades.

Read more: When should you start looking for a home?

(photo: Kim Marius Flakstad)


Would You Rather Have a Low Mortgage Rate or Pay a Lower Price for a Home?

Last updated on April 27th, 2018

My friend asked me the other day if I’d rather have a low mortgage rate or pay a lower price for a home.

I paused briefly, then said I’d rather pay less for the home. My thought process was basically that the price you pay for a home will never, ever change, whereas mortgage rates can and do change quite often.

Put another way, you can’t change what you paid for a home, but you can change the financing (mortgage rate) as often as you’d like via a mortgage refinance, assuming it’s favorable to you.

In that respect, it makes sense to go with the lower price tag as opposed to the lower mortgage rate.

A lower home price also means a lower down payment, something that is often more difficult to get around than a monthly payment.

There are Lots of Scenarios to Consider…

  • There isn’t just one scenario here
  • Let’s look at a few different possibilities
  • To see if low home prices or low mortgage rates
  • Are more powerful

What If Home Prices Fall 5% and Rates Climb 0.5%?

Let’s pretend home prices fall about five percent as mortgage rates climb a half a percentage point. It should be noted that there’s no direct correlation between rates and prices. They could both easily rise in tandem. But let’s just see how it might look.

$237,000 purchase price
20% down ($47,400)
$189,600 loan amount
3.5% rate = $851.39 monthly payment

Total principal paid after 84 months: $28,355.44
Total interest paid after 84 months: $43,161.32
Principal balance after 84 months: $161,244.56

$225,000 purchase price
20% down ($45,000)
$180,000 loan amount
4% rate = $859.35 monthly payment

Total principal paid after 84 months: $25,093.20
Total interest paid after 84 months: $47,092.20
Principal balance after 84 months: $154,906.80

As you can see from the example above, the lower priced home with the higher mortgage rate requires a lower down payment, has a very slightly higher mortgage payment, and has a lower principal balance after seven years.

So maybe that higher mortgage rate isn’t so bad.

For the record, I chose to look at the seven-year mark because most people don’t stay with their homes or mortgages for the full 30 years. Or even 15.

What If Home Prices Fall 10% and Rates Rise 1%?

Now let’s assume home prices fall 10% and mortgage rates rise by a full percentage point.

$405,000 purchase price
20% down ($81,000)
$324,000 loan amount
3.5% rate = $1454.90 monthly payment

Total principal paid after 84 months: $48,454.91
Total interest paid after 84 months: $73,756.69
Principal balance after 84 months: $275,545.09

$365,000 purchase price
20% down ($73,000)
$292,000 loan amount
4.5% rate = $1479.52 monthly payment

Total principal paid after 84 months: $37,883.13
Total interest paid after 84 months: $86,396.55
Principal balance after 84 months: $254,116.87

Obviously, the lower priced home with the higher mortgage rate would still require a lower down payment. The mortgage payment would be slightly higher, by about $25, but would have a much lower principal balance after seven years.

So again, home price is paramount, and mortgage rate, while somewhat impactful, pales in comparison.

What About a 20% Home Price Drop and a 2% Mortgage Rate Increase?

Let’s get more extreme. A 20% home price drop and a 2% mortgage rate increase!

$500,000 purchase price
20% down ($100,000)
$400,000 loan amount
3.5% rate = $1796.18 monthly payment

Total principal paid after 84 months: $59,821.54
Total interest paid after 84 months: $91,057.58
Principal balance after 84 months: $340,178.46

$400,000 purchase price
20% down ($80,000)
$320,000 loan amount
5.5% rate = $1816.92 monthly payment

Total principal paid after 84 months: $35,788.66
Total interest paid after 84 months: $116,832.62
Principal balance after 84 months: $284,211.34

In this third example, the down payment is again much lower on the cheaper home, and the mortgage payment is only about $20 higher despite the rate being a full two percentage points higher, the principal balance is also significantly lower after seven years.

Or a 5% Drop in Home Prices and 2% Mortgage Rate Jump?

How about just a 5% drop in home prices and a 2% mortgage rate increase.

$500,000 purchase price
20% down ($100,000)
$400,000 loan amount
3.5% rate = $1796.18 monthly payment

Total principal paid after 84 months: $59,821.54
Total interest paid after 84 months: $91,057.58
Principal balance after 84 months: $340,178.46

$475,000 purchase price
20% down ($95,000)
$380,000 loan amount
5.5% rate = $2157.60 monthly payment

Total principal paid after 84 months: $42,499.82
Total interest paid after 84 months: $138,738.58
Principal balance after 84 months: $337,500.18

Whoa, a $362 jump in monthly payment in exchange for a down payment just $5,000 lower. Ouch! At least the principal balance is a bit lower after seven years.

What If Home Prices Rise 10% and Mortgage Rates Fall 1%?

Now let’s look at it the other way –  a 10% rise in home prices and a 1% mortgage rate decrease.

$500,000 purchase price
20% down ($100,000)
$400,000 loan amount
3.5% rate = $1796.18 monthly payment

Total principal paid after 84 months: $59,821.54
Total interest paid after 84 months: $91,057.58
Principal balance after 84 months: $340,178.46

$550,000 purchase price
20% down ($110,000)
$440,000 loan amount
2.5% rate = $1738.53 monthly payment

Total principal paid after 84 months: $75,360.00
Total interest paid after 84 months: $70,676.52
Principal balance after 84 months: $364,640.00

While the chances of a 2.5% 30-year fixed rate are slim to none, it would result in a slightly lower monthly payment, albeit with a larger down payment.

As a result, you’d pay down the principal balance a lot faster, but still wind up with a higher outstanding balance after sever years versus the cheaper home.

Is House Price or Interest Rate More Important?

  • The price you pay for a home will never change
  • And as such it is paramount
  • It also dictates what you’ll pay in property taxes
  • Mortgage rates on the other hand can rise and fall over time
  • And you always have the opportunity to refinance
  • Assuming you have good credit, employment history, and assets

The point here is that while low mortgage rates are awesome and money-saving, they aren’t everything. Yes, if you have a high interest rate and can refinance to a significantly lower rate, it’s a good thing. That’s not debatable.

But if you’re buying a home for a lot more money today than what you could have purchased it for yesterday, or tomorrow, a super low interest rate often won’t do enough to offset the higher price tag.

Of course, it’s still better than paying a high home price and a high mortgage rate.

And there are cases where a small price drop and a large mortgage rate increase will change the logic, as seen above. Though that might be telling of what’s to come.

There are many other examples where the monthly payment difference based on rate will be marginal compared to the big jump in down payment.

A higher purchase price means a larger down payment is necessary, something many Americans can’t muster as it is. That could mean a higher LTV ratio, which could result in added costs such as mortgage insurance.

Additionally, you can’t take back the price you paid for a home, whereas you can change your rate via a refinance or simply sell the property before the full 15 or 30 years are up.

The million-dollar question is will home prices come down if rates go up a lot. And if so, how much and how fast? History isn’t very clear on this, so it might not be a good idea to play that game.

(photo: Véronique Debord-Lazaro)


The Fed Non-Taper Doesn’t Really Save Homeowners That Much Money

Posted on October 1st, 2013

It’s been about two weeks since the Fed decided to keep its mortgage purchases going strong, an initiative implemented to keep downward pressure on interest rates.

So how meaningful has the decision to keep things unchanged been for mortgage rates?

Well, all else being equal, before the non-taper event took place on September 18th, 30-year fixed mortgage rates were pricing around 4.625% for a conforming loan amount. And the 15-year fixed was pricing around 3.75%.

Once the Fed announced that it wouldn’t be messing with its mortgage purchase program, rates eventually inched down to 4.25% and 3.5%, respectively. They seem to have settled around these levels.

Save $22 Bucks a Month on a 30-Year Loan

For a $100,000 loan amount set at 4.625% on a 30-year fixed mortgage, you’d be looking at a monthly mortgage payment of $514.14. If you could secure a rate of 4.25% instead, that payment falls to $491.94.

That’s a monthly savings of $22.20 for every $100,000 borrowed. It’s not all that significant on a small loan, though on a $400,000 loan the savings are nearly $90.

So there is a chance the decision not to taper may save some borrowers who have DTI ratios near the maximum allowed, enough to turn a denial into an approval.

There’s also the potential for stronger refinance volume, seeing that it will make sense for more borrowers who otherwise would not have benefited.

After all, the interest savings throughout the term on a 30-year loan are nearly $8,000 per $100,000 in loan amount.

Save Even Less with a 15-Year Term

The savings aren’t as great for a shorter-term loan, seeing that less interest is paid over a shorter amortization period.

For a 15-year fixed mortgage, a $100,000 loan at 3.75% would cost $727.22 a month. If the rate were 3.5% instead, the payment drops to $714.88.

So for every $100,000 borrowed, the savings are $12.34. Not very significant, even on a larger loan amount around the conforming loan limit ($417k).

And the tapering shouldn’t really have an impact on jumbo loans because it involves agency mortgage-backed securities, those issued by Fannie and Freddie.

Of course, it would result in about $2,200 less in interest paid over the 15-year term for every $100,000 borrowed.

That’s nearly $9,000 for a loan amount around $400,000, which is nothing to sneeze at, but also nothing extraordinary.

In reality, homeowners who secured rates before the taper news could pay just a little bit extra each month and pay the same amount (or less) in interest.

The Psychological Impact

While the numbers aren’t that great, it is perhaps the psychological impact that matters most.

When mortgage rates finally reversed course after rising for what felt like months, it probably reinvigorated the downtrodden mortgage market.

Sure, the layoffs have already occurred, but for those still working in the industry, it’s a blessing. And for those looking to buy or refinance, it probably feels good to snag a slightly lower rate.

There’s also the “what if” factor…what if the Fed did taper? Where would interest rates be today? Would the 30-year fixed be at 5% instead? Would the housing market have lost all its momentum?

The answers to these questions are unclear, but time will tell because sooner rather than later the Fed will need to curtail mortgage purchases.

And if it’s later, it may be even more brutal for homeowners, assuming asking prices are higher and home loan lending standards are tighter.

But I suppose the mortgage industry needed a win, and lower rates are certainly important for the re-launch of HARP.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.


Zillow: Credit Score Single Most Important Factor for Mortgage Rates

Last updated on April 26th, 2018

This morning, Zillow, the company behind the love it or hate it Zestimate, released a new study that analyzed the impact credit scores have on mortgage rates and corresponding payments.

The company used data from 13 million loan quotes and 225,000+ purchase loan requests on the Zillow Mortgage Marketplace.

Zillow Studied Data on 225k Purchase Loan Requests

  • Zillow performed a deep data dive using their mortgage marketplace
  • They found that sub-620 credit scores barely receive one viable quote
  • Whereas borrowers with scores of 740+ received the best rates
  • The bar has been raised when it comes to credit scores

What they found was that borrowers with FICO scores south of 620 shopping for Zillow mortgage rates were unlikely to receive even one mortgage quote, in spite of being able to provide a sizable down payment between 15 and 25%.

At the same time, Zillow noted that the best mortgage rates are now reserved for borrowers with 740+ FICO scores, a departure from the old rule of 720 and higher.

That Questionable Credit Score Can Cost You

  • Zillow said borrowers with 740+ FICO scores receive an average rate of 4.42%
  • While borrowers with scores between 620-639 receive rates of 5.09%
  • That’s nearly .75% higher
  • Just because of credit score

Zillow said borrowers with scores above that key level were offered an average rate of 4.42% (APR) for a conventional 30-year fixed mortgage.

That compares to 5.09% APR for a score between 620 and 639. So clearly credit score matters, a lot.

Here’s a chart that details different APRs based on credit score:

mortgage APR by credit score

As you can see, the lower the FICO score, the higher the mortgage interest rate, a concept most people already grasp.

The chart also indicates what percentage of the population has a certain FICO score. Note that 28.4% of Americans have FICO scores below 620, the traditional subprime cutoff, meaning many are ineligible for most home loan financing based on credit score alone.

Yes, there are ways to get a mortgage with a low credit score, but as you can see from the chart above, it will cost you.

It will also make it more difficult to find financing, seeing that many lenders require credit scores above 620.

Fortunately, the majority of Americans out there have FICO scores in the highest bracket, with 40.3% in the 740+ category. For these individuals, credit likely won’t be an issue when trying to obtain a home loan.

However, credit score alone isn’t everything. Mortgage underwriters look at what’s behind your score as well, and if they find anything questionable, your application could be in jeopardy.

Credit Score Can Be a Huge Pricing Hit

pricing adjustments based on credit score

  • If you ever get your hands on a rate sheet
  • You’ll be able to see just how important credit score is
  • It gets especially expensive if you put little down
  • With pricing hits amounting to several points at high LTVs

Check out this screenshot from a lender rate sheet. It details the pricing adjustment for credit score across different LTV ratios.

The higher the LTV, the larger the credit score hit. Similarly, the lower the credit score, the larger the hit.

Heck, even with a halfway decent credit score of say 659 with more than 20% down, you’d be looking at a three point hit for FICO score alone.

That could be enough to push your mortgage rate from 4.25% to 4.875%, just to throw out an example.

And a rate that much higher will clearly impact your monthly mortgage payment, along with the total amount of interest you pay throughout the life of the loan.

It will also add to the layered risk of your loan application, which will make it much easier for an underwriter to flat out deny you.

So yes, Zillow is correct in saying credit score is the most important factor for rates and payments, all else being equal.

Just understand that there are other pricing adjustments that can significantly impact your rate, such as LTV and property type.

But credit score is of the few things we can all fully control, as hard as it might be sometimes.

Zillow also smartly recommends that you check your credit report at least six months before applying for a home loan. Again, great advice.

If there any mistakes or surprises you’re unaware of, tackling them could take a lot longer than you think. So knowing where you stand months in advance is paramount.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.