Latest news with #RodGriffin
Yahoo
22-06-2025
- Business
- Yahoo
How to get a mortgage
To prepare for getting a mortgage, figure out what you can realistically afford, how much you'll have saved for a down payment and if you need to improve your credit score before applying. Comparing offers from multiple lenders — at least three — could save you a significant amount of money. Along with your down payment, you'll need to pay closing costs, which typically total 2 to 5 percent of the loan principal. For most Americans, taking out a mortgage makes buying a home possible. But how do you get a mortgage? This guide breaks down the process so you'll know what to expect. 'Having a strong credit history and credit score is important because it means you can qualify for favorable rates and terms when applying for a loan,' says Rod Griffin, senior director of public education and advocacy for Experian, one of the three major credit reporting agencies. The best loan offers go to borrowers with credit scores in the 700s. That's because a strong score demonstrates you can responsibly manage your debt. If your credit score is on the lower side, you could still get a loan, but you'll likely pay a higher interest rate. To improve your credit before applying for your mortgage, Griffin recommends: Making all payments on time and reducing your credit card balances: The payment history on your report goes back two years or longer, so start now if you can. Bringing any past-due accounts current: Past-due accounts will sink your score. Making any back payments and making on-time payments going forward can limit some of the damage. Reviewing your credit reports: You can check your credit reports weekly for free at Look for errors, and if you spot any, contact the reporting bureau immediately. For example, an error might be a paid-off loan that hasn't been recorded as such or an incorrect address. Checking your credit score: This will show you a list of the top factors impacting it, which can help you understand how to get your credit in shape, if needed. Learn more: How to improve your credit score for a mortgage One way to determine how much house you can afford is to calculate your debt-to-income (DTI) ratio. This measures the amount of your monthly gross income that's taken up by recurring debt payments. The lower your DTI ratio, the more room you'll have in your budget for expenses not related to your home. 'The last thing you want to do is get locked into a mortgage payment that limits your lifestyle flexibility and keeps you from accomplishing your goals,' says Andrea Woroch, a Bakersfield, California-based personal finance and budgeting authority. You can determine how much house you can afford by using Bankrate's calculator, which factors in your income, monthly obligations, estimated down payment and other mortgage details. Learn more: How much house can I afford? Your first savings goal should be enough for a sufficient down payment. Saving for a down payment is crucial … preferably 20 percent to reduce your mortgage loan, qualify for a better interest rate and avoid having to pay private mortgage insurance. However, you don't need 20 percent down to buy a home. Here are the minimum down payment requirements for several popular loan types. Conventional loan 3% FHA loan 3.5% VA loan Typically 0% USDA loan 0% It's equally important to build up your cash reserves. Many experts recommend having the equivalent of six months' worth of mortgage payments in a savings account, in addition to your down payment. This can come in handy if you lose your job or have another financial emergency. Don't forget to factor in closing costs, which are the fees you'll pay to finalize the mortgage. These typically total between 2 and 5 percent of the loan's principal. You'll also be responsible for escrow payments — and you should expect to spend around 1 to 4 percent of the home's price on annual maintenance and repair costs. Learn more: How much is a down payment on a house? Once your credit score and savings are in a good place, start searching for the right kind of mortgage for your situation. The main types of mortgages include: Conventional loans: Conventional loans aren't guaranteed or insured by the government. You'll need at least a 620 credit score and a down payment of 3 to 5 percent to qualify. FHA loans: FHA loans are insured by the Federal Housing Agency (FHA) and have more flexible financial requirements than conventional loans. If you have a credit score of at least 580, they require a 3.5 percent down payment. VA loans: VA loans are guaranteed by the U.S. Department of Veterans Affairs (VA) and are available to qualifying military members. They typically have no down payment requirement, and credit score requirements vary by lender. USDA loans: USDA loans, guaranteed by the U.S. Department of Agriculture (USDA), are available for properties in designated rural areas. They have no down payment requirement, and credit score requirements vary by lender. Jumbo loans: Jumbo loans are conventional loans for properties whose price tags exceed the federal threshold set for conforming loans: $806,500 in most parts of the country or $1,209,750 in more expensive areas. These loans often come with higher minimum credit score and down payment requirements. Look at the interest rates, as well as the annual percentage rate (APR), which includes the mortgage rate and some fees. Even a small difference in interest rates can result in big savings over the long run. Also, consider factors like whether you'll have to pay for mortgage insurance and for how long. If you're a first-time homebuyer, you might consider an FHA loan, which requires only 3.5 percent down if you have at least a 580 credit score. If you have a score above 620, a conventional loan could be a better fit. Mortgages are also differentiated by their rate types and term lengths: Term length: Most home loans have 15- or 30-year terms, although there are 10-year, 20-year, 25-year and even 40-year mortgages. Fixed-rate mortgage: A fixed-rate mortgage has the same interest rate throughout the length of the loan, so every principal and interest payment will be the same. This predictability makes fixed-rate mortgages the most popular option, with the 30-year fixed-rate mortgage being the standard in the United States. Adjustable-rate mortgage: Adjustable-rate mortgages (ARMs) are 30-year mortgages that start with a lower, introductory interest rate. After this period, the rate adjusts up or down based on a specified market index. You may see these loans referred to as 5/6 ARMs, 7/6 ARMs or 10/1 ARMs, for example. Learn more: Compare current mortgage rates Once you've decided on the type of mortgage, it's time to find a mortgage lender. 'Speak with friends, family members and your agent and ask for referrals,' says Guy Silas, branch manager for the Rockville, Maryland office of Embrace Home Loans. 'Also, look on rating sites, perform internet research and invest the time to truly read consumer reviews on lenders.' '[Your] decision should be based on more than simply price and interest rate,' Silas says. 'You will rely heavily on your lender for accurate preapproval information, assistance with your agent in contract negotiations and trusted advice.' Reading lender reviews can help you learn about the pros and cons of various lenders, helping you narrow the field. If you're not sure exactly what to look for, a mortgage broker can help you navigate your loan options and possibly get more favorable terms than you'd be able to secure on your own. Remember that interest rates, fees and terms can vary greatly from lender to lender. Bankrate can help you compare rates from different lenders. Learn more: Bankrate's best mortgage lenders Once you've settled on a lender, get preapproved for a mortgage. With preapproval, the lender will review your finances to determine if you're eligible for funding and how much it might be willing to lend you. 'Many sellers won't entertain offers from someone who hasn't already secured a preapproval,' Griffin says. 'Getting preapproved is also important because you'll know exactly how much money you're approved to borrow.' Be mindful that mortgage preapproval differs from prequalification. A preapproval involves much more documentation and a hard credit check. Mortgage prequalification is less formal and is essentially a way for a lender to tell you that you'd be a good applicant. Still, preapproval doesn't guarantee you'll get the mortgage. You won't know that until you've made an offer on a house and successfully gone through mortgage underwriting. With a preapproval in hand, you can begin seriously searching for a property. When you find a home that you're interested in, be ready to pounce. 'It's essential to know what you're looking for and what is feasible in your price range,' says Katsiaryna Bardos, professor of finance at Fairfield University in Fairfield, Connecticut. 'Spend time examining the housing inventory, and be prepared to move quickly once the house that meets your criteria goes on the market.' If you've found a home you're interested in purchasing, you're ready to complete a mortgage application. You can complete most applications online, but it may be more efficient to apply with a loan officer in person or over the phone. When you apply, your lender will perform a credit check and request documents from you, such as: Proof of identification: Including your driver's license, Social Security card and/or other forms of government-issued ID Proof of income: Including paystubs, W-2s, 1099s, receipts of alimony and/or child support and rental income Proof of assets: Bank statements, investment and/or retirement account statements, bonds, stocks, etc. Gift letters: If a friend or relative gives you money for a down payment, you'll need to submit a gift letter. Learn more: What is a mortgage application Even though you've been preapproved for a loan, that doesn't mean you'll get financing from the lender. The final decision comes from the lender's underwriting department, which evaluates the risk of each prospective borrower and the nature of the property, then determines the loan amount, interest rate and other terms. Here are some steps involved in the underwriting process: A loan officer will confirm the information you provided during the application process. After your offer on a home is accepted, the lender will order an appraisal of the property to determine whether the amount in your offer is appropriate. The appraised value depends on many factors, including the home's condition and comparable properties, or 'comps,' in the neighborhood. A title company will conduct a title search to ensure the property can be transferred, and a title insurer will issue an insurance policy that guarantees the accuracy of this research. 'After all your financial information is gathered, this information is submitted to an underwriter — a person or committee that makes credit determinations,' says Bruce Ailion, an Atlanta-based real estate attorney and realtor. 'That determination will either be yes, no or a request for more information from you.' As you're waiting, keep these tips in mind: If your lender does have questions, answer them promptly to avoid holding up your approval. If you can avoid it, don't make any large purchases or apply for additional credit during underwriting. Any changes to your financial situation could jeopardize the loan. Once you've been officially approved for a mortgage, you just need to complete the closing. 'The closing process differs a bit from state to state,' Ailion says. 'Mainly, it involves confirming the seller has ownership and is authorized to transfer title, determining if there are other claims against the property that must be paid off, collecting the money from the buyer and distributing it to the seller after deducting and paying other charges and fees.' There are many expenses that accompany the closing. These typically include: Appraisal fee: Cost for a professional appraiser to determine the value of the property you're purchasing, often between $300 and $400 Credit check fee: Cost of running your credit report, usually less than $30 Origination or underwriting fee: Covers the cost of creating and processing your loan, usually 0.5 percent to 1 percent of the loan amount Title insurance fees: Covers title and settlement services, often equal to 0.5 percent to 1 percent of the purchase price Prepaids: Expenses you'll cover upfront, such as property taxes and homeowners insurance premiums Attorney fee: Usually a flat fee that you'll pay if your state requires an attorney be present at closing Recording fees: Flat fee to record the transaction with the proper local authority Along with paying closing costs, you'll review and sign lots of documentation at the closing, including paperwork detailing how funds are disbursed. The closing or settlement agent will also enter the transaction into the public record. The process to get a mortgage — also known as the 'time to close' — takes 41 days on average as of June 2025, according to ICE Mortgage Technology. What income is required to get a mortgage? The income required to get a mortgage depends on how large a mortgage you need and how much debt you already have. Lenders like to see a DTI ratio of no more than 36 percent, although some may approve up to 50 percent in some cases. How do I qualify for a mortgage? You'll need to meet the eligibility criteria for the specific type of mortgage you're getting. This includes parameters around credit score, debt and down payment. For an FHA loan, for example, if you have a credit score of at least 580, you'll need a down payment of at least 3.5 percent. Where can I get a mortgage? You can get a mortgage through a direct or retail mortgage lender, such as a credit union, bank or online lender; through a mortgage broker; or another type of lender. Start shopping for a mortgage by comparing top offers on mortgage rates. What mortgage questions should I ask when shopping around? Don't be shy when it comes to asking mortgage lenders questions as you shop around. Ask for help identifying what kind of mortgage loan may be the best fit for your situation. You may also wish to ask about any down payment assistance programs you qualify for. While asking about interest rates can be beneficial, keep in mind some lenders will not disclose a rate until you've applied for a prequalification or preapproval. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-06-2025
- Business
- Yahoo
Recent surveys confirm: How you feel about debt depends on your income, credit
It's well-documented that we live in a world of severe income inequality and have made little progress in closing the racial wealth gap. There's a related and similarly unjust fact of our present times: Your income and credit determine how easy (or difficult) it is to climb out of debt. Just look at research published in April from two national lenders. Santander reported more than three-quarters of middle-income Americans 'believe they are on the right financial track,' staying 'current on their bills.' Achieve noted that less than a quarter (19 percent) of its survey respondents who have sub-620 credit scores feel their debt is manageable. No wonder. The lower your income and credit, the fewer (good) options you have to get out of a funk. This isn't exactly breaking news, but it seems to be getting worse. Consider that more than one in 10 credit card holders (11 percent) made only the minimum payment toward their outstanding balance in the fourth quarter of 2024, an unfortunate high since the Federal Reserve Bank of Philadelphia began tracking this data point 12 years ago. Lower-income earners don't have a monopoly on amassing credit card debt. But higher-income-and-credit individuals and families have more time to plan their way out of it. The Santander survey showed that of the 53 percent of middle-income respondents who were considering taking out a personal loan, large majorities said they were tracking interest rates; would be more likely to apply for a debt consolidation loan if rates come down; and plan to take out such a loan in the next 12 months. Anyone who has significant debt and less income knows that waiting around, perhaps for lower rates, isn't a realistic option. Many consumers need solutions right now. After all, consumer debt is at an all-time high, particularly so for the subprime segment highlighted in the Achieve survey. About 61 percent of respondents who self-reported having excellent credit (scores above 760) said their debt is 'manageable.' Those who estimated having poor credit (below 620), only 19 percent said the same. Other recent research is more optimistic. Experian published an April survey highlighting strategies used by consumers who paid off what they'd previously considered to be 'unmanageable' debt: Working a second job or side hustle (36 percent) Employing the snowball debt repayment method (26 percent) Using a budgeting app (23 percent) 'I am encouraged by the number of consumers who said that they have paid off their unmanageable debt,' Rod Griffin, senior director of public education and advocacy at Experian, tells Bankrate. 'There is a lot of uncertainty right now, and it's easy to focus on the negatives, but consumers are still taking steps to reach their financial goals.' Call me pessimistic, but the rosier Experian survey leaves out mention of their respondents' credit scores (Experian is a credit bureau after all). Still, it found that nearly a quarter of respondents (23 percent) reported a 'Cinderella story' of fixing their personal finances. Also, 45 percent said paying off debt improved their lives. So, a happy ending is possible, even if your story's arc is highly dependent on where you stand today. If you have good credit, for instance, you might jump right into shopping around for a debt consolidation loan. Paying off debt with low income or credit, on the other hand, might feel like climbing a mountain barefoot. When people are overwhelmed and about to miss bill payments, they often don't know what steps to take — but the right strategy in that moment can make a major difference. We want consumers to know they're not alone, and that help is available. Consider these steps to get started: If you might miss a forthcoming payment — or perhaps you're already delinquent — start the conversation with your lender. Explain your circumstances and learn about potential options. Personal loan lender Discover, for example, allows some struggling customers to temporarily decrease their monthly dues, extend their repayment term or remove a delinquency status by making three straight on-time payments. As TransUnion Senior Vice President of Consumer Lending Joshua Turnbull tells Bankrate, 'It is in everybody's best interest that you have that awkward conversation with the lender. And I think people are often surprised how willing lenders are to work with borrowers to find a way to keep that from becoming a fraught situation.' Going it alone is harder. So, besides calling on your lender or loan servicer, you might consult a nonprofit credit counseling agency representative who could recommend a debt management plan or a debt lawyer who'd suggest debt settlement, to name a couple of common examples. Related: How to get debt relief It might feel like it's too late to start tracking your spending, but setting up a budget will help you organize your debt accounts and prioritize them alongside other drains on your earnings. Related: Which debt should you pay off first? Like the Experian survey respondents who leveraged the debt snowball method (or paying off your lowest balance before 'snowballing' your motivation to pay down higher balances), you have a good or least-bad repayment option out there somewhere. You just have to find it. Using a personal loan to pay off credit card debt, for example, might be a good first step if you want a single monthly payment and have a cosigner or co-borrower who can help you qualify for a lower rate. Related: Effective strategies and tips for repaying debt The snowball method might be best for you if you need an occasional pick-me-up during repayment. But no matter which route you choose toward a zero balance, motivate yourself and stay engaged. Some borrowers have found success with rewarding themselves each time they hit a payoff milestone, for example. Whatever works for you, stick to it. Related: How to set up a debt payoff plan and stick to it
Newsweek
06-05-2025
- Business
- Newsweek
Gen X, Millennials Report the Most Crushing Debt
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. While Gen Z may have a reputation for being more financially troubled, new data reveals that Gen X and millennials are far more likely to carry unmanageable debt. These age groups were in some cases nearly twice as likely to report debt they can't afford to pay off as baby boomers and significantly higher than Gen Zers as well, according to new data from Experian. Why It Matters Gen X—born between 1965 and 1980—has often been characterized as the sandwich generation, nestled between baby boomers and millennials. Gen X has avoided some of the economic uncertainty that millennials and Gen Z may have faced in their childhood and early adulthood, but they often find themselves taking on unmanageable debt. Because many Gen Xers have elderly parents and children attending college, many find themselves with debt they feel unable to pay off. Gen X and millennials are far more likely to carry unmanageable debt than other generations, according to new data from Experian. Gen X and millennials are far more likely to carry unmanageable debt than other generations, according to new data from To Know New data from Experian revealed that Gen X and millennials were far more likely to have unmanageable debt than other generations. While 27 percent of Gen X respondents said they have unsecured debt that is unmanageable, only 18 percent of Gen Z and 15 percent of baby boomers said the same. Only millennials came in higher, with 28 percent saying they had unsecured debt that is unmanageable. When broken down by gender, men had a slight edge on women, with only one in five reporting unmanageable debt, compared to one in four women. Across the board, 25 percent of all Americans are facing unsecured debt that they say is "unmanageable," the survey found. Consumers in the United States owed $17.57 trillion in total debt as of the third quarter of 2024, according to Experian. An H&R Block 2024 Outlook on American Life Report found that while Gen X had the most credit card debt of the generations, Gen Z felt more "burdened" by it. What People Are Saying Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "It's no surprise we see rising rates of unmanageable unsecured debt among millennials and Gen X. Both of these generations are reaching a point in their professional careers where their earning power is increasing and, depending on age, peaking. However, with those higher wages tend to come a higher standard of living, and with costs continually increasing, Gen X are leaning more on debt to finance maintaining their lifestyles." Rod Griffin, senior director of public education and advocacy for Experian, told Newsweek: "The pendulum is starting to move a bit toward people having more issues with repaying the debt. For quite a while, we saw the level of credit card debt increased but the ability of people to make those payments seemed to be very strong. We didn't see increasing delinquencies, didn't see people having significant difficulty. We're starting to see people have a bit more now." Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "They're [Gen X] not crushed by student loans like millennials or Gen Z, and many are hitting their stride in their 40s and 50s, earning more than ever. But here's the truth: Some are hustling hard to make up for lost time on retirement savings, while others have basically thrown in the towel, resigned to the idea that they'll be working forever. This generation is walking a tightrope between opportunity and burnout. Some are catching up while others are trying to hang on." Michael Ryan, a finance expert and the founder of told Newsweek: "Gen X isn't failing at money management; they're failing at time travel, trying to fund three generations' lives with one generation's income. And the cruelist irony? They'll finally pay off their kids' student loans just in time to move into their children's spare bedrooms." Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek: "Gen Xers are increasingly finding themselves juggling a child's college tuition, their own mortgage, in addition to the hard and soft-dollar expenses associated with caring for their baby boomer parents. Even if you are not paying your parents' bills, you may be taking time away from work to drive them to doctor's appointments or the grocery store. Whether it's cash out of pocket or time away from work, it all adds up to financial strain." What Happens Next Along with the COVID-19 pandemic, rising inflation and interest rates, Gen X and millennials have felt the hit to their wallets and subsequently their credit. "Wages never keep up with inflation in the short term, so many Gen Xers have had to turn to using more and more credit to pay for everyday expenses," Powers said. As the sandwich generation, Gen X is likely to face more hurdles moving forward as their parents become older and their children's student loans pile up. "They're caught in a financial storm," Ryan said. "Paying for college they can't afford for kids who can't find jobs, while supporting parents who outlived their savings."
Newsweek
23-04-2025
- Business
- Newsweek
1 in 4 Americans Can't Afford to Pay Their Credit Card Bills: Survey
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Nearly 25 percent of all Americans are facing unsecured debt that they say is "unmanageable," according to new data released from Experian. The rise in debt after the pandemic has caused many Americans to take on additional jobs and use budget apps amid high inflation, the new survey revealed. Newsweek spoke to several experts on the matter. Why It Matters Consumers in the United States owed $17.57 trillion in total debt as of the third quarter (Q3) of 2024, according to Experian data. As the U.S. Department of Education will once again begin reporting missed student loan payments to credit bureaus on May 5, Americans could face even more financial consequences in the coming months to their loan balances. During the COVID-19 pandemic, federal student loan payments were paused, and interest was set at 0 percent. When the pause officially ended last year, the government introduced a temporary "on-ramp" to prevent immediate financial fallout. A sticker shows that the American Express credit card is accepted at the front of a business on February 11, 2025, in Chicago, Illinois. A sticker shows that the American Express credit card is accepted at the front of a business on February 11, 2025, in Chicago, To Know The new Experian data revealed 23 percent of U.S. adults say they currently have unsecured debt that is "unmanageable." This is causing many to take on another job or side hustle (36 percent) or use budgeting apps (23 percent). Debt can grow for a variety of reasons. While it may be logical to take on a loan or use a credit card for big purchases like homes or cars, 41 percent of U.S. adults said their biggest misconception about debt before they had to manage it was that minimum payments were enough. However, for those who only pay the minimum amount, the level of debt can skyrocket due to high interest rates. Rod Griffin, senior director of public education and advocacy for Experian, said that much of the "unmanageable" debt consumers face is due to these credit card expenses. "People are becoming reliant on credit cards for everyday purchases and often lack a plan for how they're going to repay them or a plan for how they are going to use credit cards so that they don't get into trouble," Griffin told Newsweek. But student, car and home loans also take a toll. As the Biden administration made student loan forgiveness a pillar of its Department of Education, nearly 4 million borrowers collectively saw at least $140 billion in student loan debt canceled in 2024, according to Experian. This led to overall lower debt levels, but as President Donald Trump's new Education Department has restricted those options, the level of debt could see a significant uptick. What People Are Saying Rod Griffin, senior director of public education and advocacy for Experian, told Newsweek: "The pendulum is starting to move a bit toward people having more issues with repaying the debt. For quite a while, we saw the level of credit card debt increased but the ability of people to make those payments seemed to be very strong. We didn't see increasing delinquencies, didn't see people having significant difficulty. We're starting to see people have a bit more now." Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "In the years during and following the pandemic, unsecured debt - debt accrued through financial products like credit cards and consumer loans - skyrocketed as millions of Americans needed the support of these debt types to finance their lives as inflation took its toll. After leaning on this credit the past few years, the bills are piling up, and monthly payments that were once smaller and more manageable are no longer as easy to tackle." Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Unmanageable debt is hitting hardest among Gen Y and Gen Z. These younger cohorts are dealing with student loan balances that seem to never go down. There are countless stories of people making payments for years, only to watch their balances increase over time. That becomes an unimaginable situation, especially when you're also trying to cover basics like transportation, health insurance, and rent." What Happens Next Griffin said moving forward, it's likely younger generations will continue to have lower credit scores and less debt that increases over time when they enter a different stage of life. While millennials were reluctant to use credit cards when they came of age, their changing life priorities are forcing higher amounts of debt now. "Millennials as they grew older and entered into relationships, were growing their careers, starting to have families, buying homes, all of those things then involve more credit use, just by nature of you buy a house you tend to need to have credit established," Griffin said. Escalating debt could have a more significant impact on low-income households, but the middle class is also facing challenges, Beene said. "It's a worrying sign, as this debt typically carries higher interest rates and can easily become more unmanageable more quickly, and it's not just affecting lower income households," Beene said. "Middle class households are also increasingly having issues with keeping these debt forms under control."
