mortgages

SoFi Review – Legit, Scam, Worth It?

by
sofi review

What Is SoFi? In this SoFi review we will take a look at what SoFi offers and the pros and cons of SoFi. We’ll see is SoFi legit, or is is SoFia scam? SoFi, like most other niche financial services companies, is expanding. It turns out that once you get a foothold, and a few developers working full-time for you, cranking out “disruptive” finance services is easy. SoFi has a wide array of financial products including loans, banking, investing, and more. Most of SoFi money is legit, but whether it’s better than others is the key. SoFi Loans First, SoFi was a lender. If you scroll to the bottom of their webpage, you’ll see in the fine print that officially, SoFi (the lending part) is SoFi Lending Corp. NMLS #1121636. You see, lending corporations are real things that exist and are also heavily regulated. Believe it or not, there is no need, nor requirement to be a bank to give out loans. It just means you have to get the money you are going to lend out to people from somewhere besides customer bank deposits. In this case, SoFi investors supply the money the company lends out. At this stage, …

Read More

How Can I Pay My Mortgage with a Credit Card?

by
paying your mortgage with your credit card

Generally speaking, you cannot pay your mortgage with a credit card. Typically, you cannot pay for debt with debt. Of course, where there is a will there is a way. Here are four tricks to pay your mortgage with a credit card. Pay Your Mortgage With a Credit Card Cash Advance One of the good things about cash is that it is nobody’s business where you got your cash from. (Excluding, of course, money laundering, theft, and selling illegal goods.) Most credit cards offer easy cash advances. Many credit cards provide for a transfer from your cash advance credit line to a linked bank account. Some credit cards issue checks that you can write against your cash advance limit. Sometimes, but not always, you can get away with using a credit card check to pay a mortgage. However, banks and mortgage companies often electronically scan and validate checks before accepting them. It is likely that your mortgage company or bank will know you are using a credit card check to pay your monthly mortgage payment. Some may reject it for that reason. To be safe, write the check to yourself and put it in your checking account. Then, write the …

Read More

Interest Rates, Mortgages, HELOCs, Credit Cards, and the Fed

by

Originally published 12/17/2008, this post is being kept for its historical value, as the economy was still reeling from the housing market collapse and subsequent market swoon. For fun (and education), pull out your favorite charting tool and set the dates to either side of this date. This rate cut will mark the bottoming of the stock market (by March of 2009). Days like yesterday and today are why I write the Finance Gourmet.  For those of you who didn’t see it, the Federal Reserve, or Fed cut interest rates to between 0% and 0.25%.  All day today, the media has been droning on about what it means for consumers, homeowners, and the economy.  Unfortunately, they are in such a hurry to do so, that they skip over all the details.  So, here it is, what the Fed’s rate cut means to you. What To Do Now That Interest Rates Have Been Cut After reading the above, you should be aware that there are no quick and easy, or automatic solutions coming based on this rate cut.  Frankly, that isn’t really what it is supposed to do.  But, that doesn’t mean there is nothing you can do. First, don’t count …

Read More

Advanced Mortgage Tricks

by
advanced mortgage tricks

Advanced Refinance Tricks For the Financially Well Off Got plenty of money socked away for the kids’ college? Already have a retirement plan and funding it well? When someone asks about an emergency fund do you think, sure, which account would I use? Then, here is a trick for you. Mortgage interest rates are at historic lows. As I write this, it wouldn’t be hard at all to get a 3% mortgage if you have good credit and put 20%+ down. What if, you took $100,000 out of your mortgage with a refinance that lowered your interest rate enough to cover all closing costs, and then, put that $100,000 into a solid dividend paying stock? Just for example, right now, Verizon pays something like 4.85% per year at its current $52.50 stock price. If you took the $100,000 you got from your cash out refi, and invested in in Verizon stock as a long-term investment, Verzion would spend the next 10 or 20 years paying you the equivalent of 4.85% on your $100,000 stock investment. Which means you are earning more on your investment than you are paying on the extra mortgage principal. Now, you do have to pay 15% …

Read More

House Poor Family Trades in For RV

by
house-poor-rv

While this isn’t my usual fare, this recent article on CNBC struck a chord with me, and not necessarily in a good way. Not a bad way either, but… odd? This article details the troubles of a family that had a $4,200 per month mortgage on their home in California. Couple that with a paragraph about $110,000 in student loans, and you’ve got yourself a clickbait ready, shareable personal finance article. Here is the weird part. The article, as all of these articles do, leaves out a lot of the details that likely make this a one-off article that isn’t shareable, or doable by pretty much anyone. For example, there was a months-long road trip that has now lasted over a year. That’s cool. Where does son Aiden (8) go to school? There’s also the part about how it “helps” that neither parent had traditional 9 to 5 jobs. You mean, it’s absolutely essential that they don’t have 9 to 5 jobs, or at least that they can be full-time remote. Lastly, while living in an RV cut their living expenses from that $4,200 mortgage, the RV that they make this lifestyle work in was apparently gifted after the initial …

Read More

Should I Pay Off My Mortgage Instead of Investing

by
Should I Pay Off My Mortgage Instead of Investing 1

Figuring out what the best thing to do with your money can be difficult. Many people get caught up in all the possibilities. They wonder if it is wise to pay off your house mortgage. Should they pay off credit cards or put higher down payment on a new home? Should I pay off my car loan with a home equity loan? Is it better to pay off your house or keep the money? And, most of all, should I pay my house off at retirement? We have discussed if it is smart to pay off your home early before. Unless paying off your home still leaves you with a sizable amount of cashable assets, the answer usually is not what you think. For people without substantial assets remaining after paying off the mortgage, owning your house free and clear does nothing but trap a lot of money where you can’t get it, inside your house. Financial professionals call the equity in your home that you are not going to sell “dead equity.” Here is what to do with your assets before you pay off your mortgage, and, a quick look at understanding the pros and cons of a reverse …

Read More

New Home Sales Up During Covid

by
new housing

An interesting wrinkle in the new Covid economy showed up today. The U.S. Department of Commerce reported that new home sales in August rose by 4.8%, on top of a spike 13.9% in July. Buying New Homes Overall home sales are having difficulty in no small part because home buyers are reluctant to do several showings in a day in a Covid world. Those showings are what motivate buyers to purchase existing homes. Unlike existing home sales, new homes are typically sold via model homes. Model home are shiny, bright, and seem cleaner, even though more people may actually move through them each day. Furthermore, rather than having to see numerous homes to find the perfect one, buyers need only find a model they like. Builders then allow buyers to tweak that model. Low Mortgage Rates Record low mortgage rates are also helping drive sales for new construction. Unlike existing home sales that are dependent upon subjective appraisals, lenders can easily get a feel for the current value of the one of many new buildings a particular buyer looks to purchase. Is Zelle a scam? Finding a mortgage, however, even for new construction is getting harder. It turns out lenders …

Read More

Return of High Risk Mortgages

by

There was a recent article over at CNBC about high-risk mortgages and their resurgence, sometimes at the hands of the very same players who offered them before the big banking crisis and subsequent recession of 07-08. Of course, it’s easy to wring your hands and worry, “Here we go again,” but before you do that, take a closer look. High-Risk Mortgages Are Not “Bad” There is nothing wrong with a high-risk mortgage. Just like a no credit credit card, a high-risk mortgage has a greater chance of defaulting than one given to lower risk borrowers. However, that isn’t inherently a bad thing. On a macro level, the credit markets work a lot like the insurance markets. Take life insurance, for example. Some people are going to die, and you are going to pay out on those policies. However, as long as the premiums you take in from everyone exceed the amounts you pay out, the company profits. Everybody wins. Similarly, with high-risk home mortgages, you know some people are going to default. Again, as long as your portfolio of mortgages collects more payments than you lose through defaults, you win. This is how the entire bond market works. Risk is fine, …

Read More

How To Pay Off Your Mortgage Early The Smart Way

by
dream of paying mortgage off early

There are a lot of people out there who dream of paying off their mortgage early. As a financial advisor, I would often have to talk them out of unusual schemes for paying off their house early, like raiding their 401k. It isn’t a bad thing to pay off your mortgage, but it isn’t as great, or as simple, as you might think either.   The Right Way To Pay Off Your Mortgage Early Instead of raiding your retirement fund, or cashing in Aunt Nancy’s inheritance, the best way to pay off your mortgage early is to add a little bit of extra principal each month. Just like saving each month adds up over time, so does paying off your mortgage. Each extra bit of principal you pay not only lowers the principal, but it lowers the amount of every payment after that going to interest. So, if you add an extra $20 per month starting with payment one on a thirty year mortgage, that’s going to add up to a lot of extra principal; it’s just going to take a very long time. In reality, those extra payments won’t add up to much until near the end of your …

Read More

Mortgage Rates Climbing

by
rising mortgage interest rates

Mortgage rates have ticked up in the this month. Despite stories saying that rates have “jumped” the rise has been rather tepid, and still hasn’t taken rates back to their post election highs in the 4.25% range. Rates had peaked back in January when some analysts still suspected that Crazy Trump was all an act and that the newly elected President would settle into the office as a regular business-friendly, regulation-busting, Republican. However, the Russia scandal has plagued the administration and health care has twice stalled out, pushing any pro-business legislation off. As a result, rates have basically trended eastbound and down, if you will. Do Mortgage Rates Really Matter? It’s always dangerous to say, “This time it is different,” in the world of finance. Such sentiments are typically used to justify things that should not be justified. However, is the world really different this time around with regards to mortgage interest rates? Consider that rates are still historically low, and that they will continue to be so long as they stay below the 5.0% to 5.5% range. A full percentage point is several Fed interest rate hikes away (a year… two?), or an economy that shakes off its slow …

Read More