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As 2019 gets underway, the Granite State is in the midst of a white-hot seller’s market. Single-family home prices in New Hampshire increased 7 percent last year, with the current median price sitting at $287,000, according to the New Hampshire Association of Realtors. Despite that steady increase, New Hampshire home prices still sit well below the national median price of $302,400, as of November 2018.
These rising prices are, to some degree, the result of a decreasing housing supply, with 700 fewer homes available on the market compared with last year and representing an 18 percent decrease year over year. Moreover, houses currently stay on the market for an average of 61 days, reflecting the high demand and competitive home buying landscape.
However, the New Hampshire market could reverse course and become more buyer-friendly over the next two or three years, as home prices fall back in line with the Rate of average wage increases in the state.
While national and state-level factors impact mortgage rates in N.H., they are not the only determinants that inform the interest rates borrowers receive on their home loans. Prospective home buyers need to educate themselves on the various elements that impact mortgage and refinancing rates to save the most amount of money possible over the lifetime of their loan.
To guarantee the best mortgage rate possible, borrowers need to be aware of the various factors that determine what lending terms banks, credit unions, and other financial institutions are willing to offer. These four, in particular, can have a profound impact on your mortgage rates and how expensive a loan is over the entirety of its life.
There are a few criteria, each weighted differently, that play into a borrower’s score. FICO scores, for instance, roughly break down like this:
Lenders will use credit scores as a gauge to identify the level of potential risk in extending a loan to any particular borrower. A record of missed payments, for instance, would immediately raise a red flag with any mortgage lender. Borrowers whose credit scores fall well beyond the “good” to “exceptional” range may be better served working on improving those figures before applying for a mortgage.
Most financial experts agree that home buyers should be willing to make a down payment worth at least 20 percent of the house’s total price to net the best loan terms. In some instances, borrowers may receive lower interest rates paying an amount slightly below that 20 percent threshold because financial institutions will tack on mortgage insurance. The addition of monthly insurance payments may cost home buyers more money over the life of their loan, so they should always compare the total price of any mortgage offer to get the best deal.
The 30-year fixed-rate mortgage is relatively standard for home loans, but lenders may also offer loans with 10, 15, 25, 40 or even 50-year lengths. Finding the loan length that’s right for you comes down to how quickly you want to pay off your mortgage and how much money you can realistically dedicate toward your mortgage payments each month.
The home buying process is long and often complicated, involving numerous parties, financial institutions, and contractual terms. Shoppers need to resist the urge to try and oversimplify any step along the way, especially when it comes to finding a mortgage. Seemingly minuscule differences in mortgage financing, duration, and other associated fees can add up over the lifetime of a loan.
A mere 0.5 percent reduction in your loan’s interest rate could save borrowers $3,500 during the first five years of their mortgage alone.
Comparative shopping is essential to guaranteeing that borrowers get the best mortgage rates and terms that fit their current financial situation, as well as long-term housing plans. Despite the significant impact that mortgage rates have on the overall cost of a new house, 77 percent of borrowers only apply for a mortgage with one financial institution and approximately half of all home buyers don’t even consider looking beyond a single lender.
Borrowers should also explore all of their loan options. While a 30-year fixed-rate mortgage is the status quo, other loan types may be more attractive depending on an individual’s financial circumstances, long-term housing plans, and other variables. For instance, someone planning to relocate or move into a bigger home may be better off getting an adjustable-rate loan with lower up-front interest rates than a longer, fixed-rate mortgage.
Finally, don’t be afraid to negotiate the terms of your mortgage with your lender. Several fees are typically attached to the home buying process, including appraisal report, application, document preparation, and title search fees. Many of those can be negotiated, especially if the stated cost is higher than the market standard. Check around what other home buyers in New Hampshire have recently paid for these fees and request that yours be reduced to match them.
The post Get the Best Current Mortgage Rates in New Hampshire: Compare & Save Today! appeared first on Good Financial Cents®.
In the time since its charter in 1987, Flagstar has grown into the fifth-largest bank mortgage originator in the U.S. Its branches are centralized in Michigan and California, but it also offers online borrowing tools, so you can explore Flagstar mortgage rates and submit a loan application.
Flagstar is among the nation’s largest mortgage originators. The bank opened in 1987 and offers a blend of fixed-rate, adjustable-rate, VA, FHA, and jumbo loans.
Their branches are located in California and Michigan, but they also provide an online application process that makes their services accessible from anywhere.
The bank’s resource center and a blend of loan options make it a natural fit for first-time homebuyers, but it offers plenty of options for those in other stages of their home-purchasing journey, as well.
As a large, far-reaching lender, Flagstar provides a wide range of products aimed at a diverse array of customer types.
With government loans aimed at veterans and first-time home buyers, and jumbo loans available for those in a strong financial position, the blend of mortgages available from Flagstar run the full gamut of options.
Flagstar blends fairly conventional fixed and adjustable-rate loans with specialty mortgage options designed for those seeking a creative lending solution. Here’s a look at a few of the bank’s standout products (all rates and APRs are figured as of December 18, 2018):
Flagstar offers fixed-rate loans for both 30-year and 15-year terms. The 30-year fixed-rate mortgage currently comes with a starting rate of 4.6 percent with a 4.734 APR. Those figures drop to 3.907 with a 4.136 APR.
Flagstar offers a degree of flexibility concerning down payments, but will typically require private mortgage insurance if your down payment is less than 20 percent of the total value of the loan.
The lender recommends its fixed loans for those who are mainly focused on having a predictable budget where they can more easily anticipate home costs on a month-to-month basis.
The lender offers a 7/1 adjustable-rate mortgage. This means the rate will be set for the first seven years of the loan and then be reset based on market conditions. Current rates stand at 4.309 percent with a 4.978 APR.
Flagstar’s adjustable-rate mortgage is designed to offer flexibility and provide borrowers with a lower initial monthly payment than is typical for a fixed-rate mortgage. While there is some uncertainty after the initial seven-year period, it may also be possible to refinance the loan if the new rate doesn’t fit your needs.
The Federal Housing Administration offers specialty solutions designed to help first-time homebuyers get a loan even if they only have a small down payment. These loans are insured by the FHA and Flagstaff offers them in a 30-year fixed format with a 4.297 percent rate and 5.464 percent APR.
The U.S. Veteran Department of Veterans Affairs designed an exclusive mortgage product capable of covering 100 percent of the home price. The financing opportunity is only available to active-duty service members, veterans and, in some cases, eligible surviving spouses.
Flagstar offers this loan for both home purchases or for refinancing, with current rates at 4.287 percent and a 4.649 percent APR.
Jumbo mortgages are meant for those seeking a substantial quantity of funds. They can extend to more significant amounts of money than a conventional home loan, with Flagstar loan amounts ranging between $453,101 and $3 million.
umbo loans require borrowers to blend some combination of having a high credit score, making a large down payment or having a particularly low debt-to-income ratio.
Flagstar has built its identity around a highly relationship-driven banking model. This has extended into its mortgage processes in the form of online tools that provide convenience and ease of use to those seeking to purchase a home.
The website features a portal for an online application, letting you provide vital information for the loan, but not asking for particularly sensitive details, such as your Social Security Number.
You can also apply for a mortgage via phone or use the website to set up an in-person meeting at one of the lender’s branch locations.
When applying online with Flagstar, you aren’t giving up on the potential of a more personal, relational experience. Instead, a Flagstar representative specializing in mortgages will follow up with you about your application to guide you through the process.
The bank also boasts a resource center, FAQ page and similar details aimed at helping you obtain critical information on the mortgage market and how different types of loans work.
This content comes in a variety of forms, including advice articles in the resource center and small descriptions of each loan type on the landing page.
In the same way, Flagstar also builds calculators into a variety of its pages, creating an intuitive path to estimating your costs and covering issues such as:
While Flagstar Bank emphasizes customer relationships in its lending ideals, a J.D. Power survey found that it rates “about average” when compared with other primary mortgage originators.
Flagstar boasts a reasonably strong reputation in the market despite its relative youth. The bank launched in 1987, and in that time has grown quickly while acquiring branches from a variety of other financial services providers, including some Wells Fargo and Desert Community Bank offices.
The Better Business Bureau gives Flagstar’s National Corporate Headquarters in Troy, Michigan, an A+ rating, with 101 complaints closed in the past three years.
Flagstar is a member of the FDIC, an Equal Housing Lender and ranked among the ten best banks in Michigan by GoBankingRates.
Because Flagstar’s website is designed heavily around an online application process, some details about qualifications for mortgages are difficult to pin down. The lender prioritizes the personal, relational touch of having an officer look at your initial application before delving deeply into qualifications.
However, a few general guidelines do apply:
|
Down Payment Required |
Private Mortgage Insurance Required w/ <20% Down Payment |
Special Qualification Requirements |
|
|
Fixed-Rate Mortgage |
Yes |
Yes |
No |
|
Adjustable Mortgage |
Yes |
Yes |
No |
|
VA Mortgage |
No |
No |
Yes |
|
FHA Mortgage |
No |
No |
Yes |
|
Jumbo Mortgage |
Yes |
Yes |
Yes |
For the most part, Flagstar’s requirements are relatively standard for the industry, with its non-specialized loans typically needing some form of down payment and personal mortgage insurance being a fairly common requirement with a down payment below 20 percent.
The post Flagstar Mortgage Rates Review appeared first on Good Financial Cents®.
There is a “very hot” housing market in Delaware, Zillow reports, with a median listing price of $284,000 in the state and a Zillow home value index of $237,300. This is somewhat higher than the national median listing price, which is $275,000, and the national home value index of $220,000.
These numbers are substantially higher now than they were just a few years ago, demonstrating the strong growth the Delaware housing market is experiencing. Today’s housing market in this state seems to be stronger than it was during and immediately after the downturn that started in American housing markets around 2007.
Delaware homes have regained the value they lost in the downturn during the Great Recession and appear to be well-positioned to continue growing rapidly. Homes in this state reached their lowest Zillow value on record in September 2012, at just $184,000. This is a little higher than the median Zillow home value index for US homes that month, which was $151,000. As of February 2019, the median home value index for Delaware homes is $242,000, higher than the US market value of $226,000.
When shopping for a home in Delaware, it’s helpful to remember that the national economy does have an impact on mortgage and refinance rates. Local economics are a significant factor as well, in addition to Delaware state laws, foreclosure rates, average home values, and lender competition for new mortgages.
There are other factors that can impact mortgage and refinance rates for individuals, too. In this article, we will review and explain how some of these factors influence rates so prospective borrowers can create their own plans and successfully navigate the mortgage loan process in Delaware. We also offer more advice on how you can get the best possible mortgage rates in Delaware when you decide to close on your purchase.
There are many different factors that impact mortgage and refinancing rates in Delaware. It is important to learn more about how these different elements influence rates, because even small differences can result in savings of several thousands each year for Delaware borrowers.
While applying, remember that a higher down payment can help you achieve a lower mortgage rate. Lenders carefully consider what loan applicants are able to pay down on a new mortgage. With a higher down payment, borrowers represent reduced risk for the lender and end up taking on a smaller overall loan amount. Applicants paying at least 20 percent down are typically considered to be low risk and usually receive the best overall rates.
In the mortgage application process, borrower credit scores are typically one of the most significant factors for receiving a great offer. Borrowers with high credit scores are usually considered to be less risky than other applicants, while low scores often make it more challenging to receive a low rate. These borrowers will probably end up with less favorable terms than other applicants. In other words, having a great credit score matters.
The length of the loan term is another important factor that determines your rates. Typically, shorter loans have the lowest rates and overall costs. This does usually mean higher monthly payments, though, which is something applicants should keep in mind. Buyers who are comfortable paying more each month can save tremendously on the overall cost of their home over a shorter term. Longer terms can also make home buying more affordable, though, since it may result in a more manageable monthly payment.
As you think about applying for a mortgage, keep in mind that lenders also carefully consider what applicants are able to pay as a down payment on their home purchase. Higher down payments mean a smaller overall loan and a reduced risk for the lender. Buyers who can pay at least 20 percent are usually considered to be fairly low risk, so they receive the best rates.
Since borrowers may pay different rates depending on the type of refinance they choose, considering multiple lenders and offers may make the best financial sense. Cash-out loans may have different rates than fixed and adjustable-rate refinance loans, for instance. It pays to look around rather than signing up with the first lender you receive a quote from.
Bigger loans on more expensive homes may be a greater risk to the lender because they are required to provide more capital to finance the purchase. Low-value homes may be located in places where there is limited economic activity, which some lenders believe presents a higher risk. In either situation, borrowers should shop at multiple lenders to get the best deal, particularly for large and small loans.
Learning more about the market in Delaware can help you weigh these factors and determine the best possibilities for your own purchase.
Receiving multiple quotes helps applicants find the best mortgage rates and refinancing in the state of Delaware. Picking the first lender who provides a quote can result in leaving money on the table. In fact, up to 47 percent of rate shoppers visit only a single lender for a quote. As a result, many borrowers end up paying tens of thousands of dollars more on the cost of their homes.
In a single year, you can spend several thousand dollars less than you would otherwise if you decided to shop around instead. Applicants who want to consider more than one offer but aren’t sure where to start can consider this process for finding the best mortgage rates in Delaware:
Home buyers in Delaware have many different options for mortgage lenders. As you apply, look for multiple quotes and complete more than two applications if you can. This will give you more confidence that you are getting the best possible deal. Here are a few of our top recommendations in Delaware:
The post Best Current Mortgage Rates in Delaware: Compare & Save Today! appeared first on Good Financial Cents®.
NVR is a specialized mortgage lender that offers loans exclusively for those purchasing homes from one of its partners, Ryan Homes, Heartland Homes, and NVHomes. Because of this, its mortgage offerings emphasize loans for new construction and development, meaning you may get access to a few specialized loan options that aren’t commonly available across the industry. In particular, NVR provides second trusts and extended rate locks to make it easier to manage a mortgage throughout a construction project.
In a more general sense, NVR provides a relatively diverse array of mortgage products, blending access to specialized government mortgage programs with conventional and jumbo loans. You should expect to go through a traditional mortgage application process with NVR, as online applications aren’t available.
If you’re exploring a loan from NVR, chances are you’re considering purchasing a home from one of its partners. The lender’s positive Better Business Rating can be reassuring under these circumstances.
Read on to learn more about NVR and its mortgage offerings.
There are times when working with a specialized lender can pay off for a home buyer. NVR Mortgage fits the bill in this way, as its loans are accessible exclusively to home buyers purchasing from partner organizations Ryan Homes, Heartland Homes, and NVHomes.
While these close partnerships can limit the scope of who can access loans from NVR, it also positions the lender to offer highly nuanced products built on a keen awareness of the property or project at hand. NVR mortgage rates are competitive, and many elements of the application process can be completed online.
NVR Mortgage provides access to a diverse array of loan products. While accessing the lender’s loans requires you to be purchasing a home from one of its partners, the actual mortgage options are much more accessible and varied. The firm offers access to mortgages associated with a variety of government programs alongside a range of common loan options.
With this variety in mind, NVR can be a natural fit for borrowers looking for a good deal for their first home or those seeking a large loan. The partnerships with Ryan Homes, Heartland Homes, and NVHomes also point to the lender’s natural fit for those seeking a recently constructed home, as these companies often develop new construction projects.
Mortgage products available from NVR include:
NVR advises that fixed-rate mortgages are great if you’re looking for a guarantee that your rates won’t change, or if you’re on a fixed income. Generally speaking, fixed-rate loans are recommended for those who intend to live in their home for a long time, letting them get the most benefit from the consistent, predictable rate.
An adjustable-rate loan will have a fixed rate for a set period before transitioning to an adjustable-rate that shifts based on market conditions. This can be great for getting some initial savings on your loan, but can also come with higher costs and more unpredictability over time.
Some major government agencies offer access to loans that they insure. As a result, you often end up with lower rates and don’t need to make as large of a down payment. FHA mortgages are typically aimed toward first-time homebuyers.
VA loans are designed for active members of the military, veterans, and eligible spouses.
USDA loans are available for borrowers purchasing properties in areas deemed as rural locations by the agency.
Conforming loans are mortgages structured for up to a certain amount of funds as set by industry underwriting guidelines. NVR offers conforming loans for up to $417,000. Jumbo loans are available for amounts larger than that, providing an ideal option for those seeking a larger property or a home in an expensive market.
NVR offers access to a variety of lending programs geared toward those who are either purchasing their first home or who have not owned a home for the past three years. In some cases, these loans come with lower down payment requirements, but also have special qualification requirements such as income or occupancy limitations.
A second trust creates an opportunity to avoid high interest rates or the pricing spikes that can come with jumbo loans. In practice, you take any remaining equity you have that is not required for your first mortgage and apply it to the trust, allowing you to take on an adjustable-rate mortgage in which only interest rate payments are required. This can also help you ensure that more of your mortgage payments remain tax-deductible over the life of the loan.
This loan offering is a natural fit for those constructing a home. An extended lock sets your mortgage rate for a longer period of time than usual to safeguard you from any rate increases.
NVR’s mortgage offerings are tightly linked to the property development and construction companies it works with. As such, it’s common for the lender to work with borrowers whose homes are still under construction. This leads to a somewhat unconventional mortgage application process that makes online lending less feasible than it may be in other instances.
Because of all of this complexity, you can’t apply for a loan or get a quote online. That work has to be done in direct collaboration with a loan officer. While this may make it more difficult to comparison shop or file your application, it ensures you get the specialized lending process needed to align the mortgage to the home being built on your behalf.
While NVR doesn’t provide online lending options, it does offer a variety of resources to help you navigate the mortgage and home buying processes. NVR provides a resource page with articles that offer insights into what to expect when working with a lender. There’s background information on how to prepare for a loan, what the application process looks like, and how closing works. This provides visibility into cost expectations and the work that will need to be done in preparation for a mortgage.
NVR is an Equal Housing Lender and operates under the NMLS #1127.
Due to its relatively small size and specialized service model, NVR doesn’t have a significant national reputation. However, one of its prominent branch locations in West Chester, Ohio, obtained an A+ rating from the Better Business Bureau, with zero complaints listed. The BBB does not accredit it. However, NVR Inc., the parent copy that NVR Mortgage operates under, has received 241 complaints logged by the BBB over the last three years.
One-hundred and six complaints have been resolved in the past 12 months. It’s worth noting that these complaints incorporate issues with the various home construction companies NVR works with, not just the mortgage products. As these services are tightly linked, it’s important to assess the full experience of construction and home buying into the equation as you consider your mortgage options.
NVR operates as a relatively traditional lender, using conventional data sources throughout the application process.
The lending procedures employed by NVR tend to be highly customized and personalized based on the project and borrower. As such, qualification details aren’t widely publicized on the NVR website and are instead discussed as part of the consulting process around the mortgage. In general, you can expect a degree of flexibility, as NVR offers access to a variety of specialized loan types, making it potentially easier to find a fit for your needs.
Of course, your credit score will influence your likelihood of getting a mortgage. Here’s a look at what you can expect:
|
Credit Score |
Quality |
Likelihood of Approval |
|
760+ |
Excellent |
Very High |
|
700-759 |
Good |
Fairly High |
|
621-699 |
Fair |
Somewhat Likely |
If your credit score is lower than 620 or if you don’t have a credit score, than you may be fighting an uphill battle trying to get a mortgage.
As you consider how to qualify for an NVR mortgage, it’s important always to remember that NVR loans are only accessible for homes sold by one of its partners.
The post NVR Mortgage Rates Review: Today’s Best Analysis appeared first on Good Financial Cents®.
Maria writes in with a great question:
I don’t understand why it is so hard to get ahead financially. We live in the most productive and prosperous era in human history. Why are almost all Americans living paycheck to paycheck? I mean, I get the easy answers like student debt and stuff, but why is this happening?
I’m going to give you a very simple answer: our brains aren’t wired for the modern, prosperous world. That is really what it comes down to. Our brains simply aren’t wired for much of what the modern, prosperous world provides for us. For the vast majority of people, getting ahead financially requires willpower, intense self-reflection, long-term habit building (which either rests on willpower or on how you were raised), and/or a lot of luck, because we’re working against how our brains are wired.
Throughout virtually all of the roughly two million years of human existence, the humans that have survived and thrived were ones that could survive with a hunter-gatherer lifestyle. The period of time in which the world might be described as anything like the modern world has been extremely short by comparison, a few hundred years at most.
When you take a deep look at how our brains are wired for survival as hunter-gatherers, scavenging for our next meal and avoiding immediate threats, it shouldn’t be surprising that the types of instincts and responses that helped us then are actually working against us now.
I’m going to stick to several such instincts, discussing how they worked for us then, work against us in terms of personal finance success now, and what we can do to overcome them.
To put it simply, unless the benefits are incredibly obvious and incredibly strong, our brains almost exclusively react in terms of what creates the best life for us in the short term future, not the long term. For us to worry about things beyond the next week or two, we have to be shown that something is overwhelmingly beneficial long term or that it’s overwhelmingly costly long term and should be avoided.
Things like skipping a short term pleasure because it will mean a small amount more in a retirement account in thirty years isn’t enough for most people. This is why most people don’t save for retirement, or if they do, it’s a pittance, usually done to make someone else happy. The number of people who save significantly for retirement is surprisingly few, particularly when you get far away from retirement.
This is true for almost all long term goals. For example, most people choose to eat an unhealthy diet instead of a healthy one because short term flavor and convenience trump long term health. The short term benefits – flavor, mostly, with a bit of convenience, too – outweigh the much greater long term costs. It’s why most people don’t exercise – the short term benefits of not exercising (free time, not having to exert oneself) aren’t enough, in the minds of most, to outweigh the long term health costs of not exercising.
What can we do about this in terms of finances?
Focus on short term rewards of frugal behavior. We have to find habits and routines in the short term that cost less without providing much less short term pleasure than the more expensive options. Again and again, people will spend their money on things that provide short term rewards, even if the long term costs are disastrous.
A great example of this is going to the library. I already love reading books, so it is very tempting to go to the bookstore and spend a lot of money. Going to the library is a very good substitute for this, as I can walk through the halls of either one and walk out with an armload of books to read. Recognizing that I should really only buy books that I will read several times means that I only shop for books that are intended for multiple reads or for reference. A library usually has more choices than a bookstore and it doesn’t cost me anything to grab several of them.
Another example of this is going on a walk. It costs nothing, it feels good for a variety of reasons (time outside, your body is moving around, sunshine, endorphins at the end, etc.), and you often feel really good afterwards, especially if you have a daily step count goal.
Automate long term behavior during moments of clarity. Whenever you’re in a mindset where you can really see the long term benefits of financial success, that’s the moment in which you should set up some automation or take on a big one-off frugal project.
For example, you might sign up for the 401(k) at work or bump up your contribution there, sign up for a Roth IRA with an automatic contribution, set up an automatic transfer to a savings account each week to build up an emergency fund, or automate an extra debt payment through online bill pay.
On the frugal side of the coin, you might do something like switch to a programmable thermostat, air seal your windows, put a weather strip on your door, or make a whole bunch of meals to store in the freezer.
Focus on the short term benefits of making long term financial progress, especially less stress. One of the most surprising benefits of long term financial success that I didn’t really expect was the loss of background stress in my life. I didn’t realize it at the time, but living a paycheck to paycheck lifestyle was contributing a lot of low-level stress to my life. It made me worried to check the mail. It made me extra stressed about my job. It made me worried about every little expense, that I’d forget about something and overdraft my checking account. That stress added up and it made my life less pleasant.
As I began to make real financial progress, all of that background stress gradually melted away. It made my day to day life a lot better in the process.
It turns out there are lots of little benefits to financial success that are wonderful in the short term. I don’t feel handcuffed to my job and if I became unhappy with it, I could move on without much worry at all. I could even switch careers entirely without much worry. I don’t worry about things like my car breaking down, and even if it did happen, I could handle it. These little stresses – and so many more – no longer register for me.
When we were hunter-gatherers, we needed to be wired to obsessively focus on and desire things like finding food and finding fresh sources of water. We needed to desire those things intensely and feel a huge burst of pleasure when we found them, because we needed those feelings for motivation to actually do the work to keep ourselves alive. We’d obsess over the taste of berries or, if we were really lucky, meat, and the taste of fresh water… mmmm.
Yet, when we have those things, we swallow them down quickly, feel full for a bit, and then they’re forgotten. Soon, we’re craving another fleeting pleasure.
That phenomenon of strong temptation leading to a fleeting pleasure leading to the pleasure quickly vanishing leading to a desire to find that pleasure again as an endless cycle hasn’t gone away, as almost everyone knows. We all do it, with the foods we crave, the little splurges we give ourselves, and so on.
This is why so many stores these days have a coffee shop right at the entrance, selling overpriced coffee-flavored beverages and pumping out an attractive aroma. Those places know that a fair number of people on their way into the store are seeking a little treat for themselves and so those shops hijack that normal cycle of pleasure seeking that all of our brains go through and use it to extract money straight from our wallets.
How do we fight this cycle?
Reflect on how you feel about perks a week or two after enjoying them. Sometimes, you simply have to show your brain over and over again that the brief pleasures that it constantly seeks and desires really aren’t all they’re cracked up to be. Over time, you can hijack that instinct a little and learn that if you’re dumping resources into something that’s really fleeting, it’s not going to result in an overall good outcome for you.
Every few months, I sit down with my credit card statement and intentionally review everything on it, purposefully looking for expenses that are basically expenses done to give me a burst of pleasure. I bought some item, or I indulged in some food or drink, or something like that. Do I even remember this expense? Often, I don’t. If I do, was it really worthwhile? Often, it wasn’t. The situations where it was worthwhile are usually ones where there was a social element or the purchase was planned out in advance. Almost every spur of the moment expense is one that I look back on with regret, as it was just me seeking a brief burst of pleasure.
The thing is, you can find those little fleeting blips of pleasure in all kinds of free things, so find lots of free things in life that will provide that little blip. That way, your mind, when it’s instinctively seeking out a little taste of pleasure, doesn’t just instinctively open the wallet. I have a huge repertoire of these little pleasures, from things like sitting for an uninterrupted hour to read a book I love or going for a walk in a park or drinking some really cold water (I keep refillable water bottles in the fridge near the air vent so that they’re verging on freezing).
Make it harder to seek costly fleeting pleasures. Another good way to stop the routine of spending money for fleeting pleasures is to simply not take money with you when you leave the house. Just leave your credit cards at home. If you do want to have some money, take a small amount of cash with you, but no credit or debit cards. That way, you’re cut off from tossing money at unplanned expenses due to pleasure seeking and instead you have to look for extremely low cost or free things to do.
In the same vein, delete your credit card information and other payment information from online retailers. Again, this prevents you from operating on impulse. This forces you to think for a little bit longer before exchanging money for that brief burst of pleasure.
Try to achieve contentment at home before shopping. If we feel good about things before we leave the house, we’re less likely to want to seek some sort of pleasure when outside of the house.
This is why it’s a good idea to prepare a grocery list then eat something before going to the grocery store. With a full belly and a grocery list in hand, we’re much less likely to throw incidental items into the shopping cart.
It’s also a good idea, if you enjoy coffee, to make yourself some coffee at home in a to-go mug so that you’re far less tempted to spend $5 or more at that coffee kiosk. It’s far better to spend $0.60 at home on a big cup of homemade coffee than $5 at that kiosk.
Reflect explicitly on the downsides of unnecessary things you spend money on. In other words, if you follow the previous tip of reflection on how you feel about perks a week or two afterwards, you’ll likely recognize some negative things about those perks.
That fast food treat was probably atrocious for your long term health, as was that sugary coffee. That tech gadget you really wanted didn’t really add up to the life change that you thought it would and now it’s just sitting there gathering dust. Those new clothes didn’t give you a big self confidence boost and now they’re just jammed in the closet with other clothes and now the other clothes look shabby and you feel like you should replace them, too. All of that alcohol left you feeling like crap the next day and a little flabbier around the midsection. And all of these things cost money, denying you other opportunities.
Maybe that pleasure burst wasn’t all it was cracked up to be.
Look at where you can get many of the same upsides without the downsides (or with much fewer downsides). Obviously, you wanted some kind of upside when you sought that pleasure. What other things can you do that provide that pleasure with fewer downsides, especially monetary but in other regards, too?
Rather than gobbling down fast food, maybe have a couple of healthy granola bars in your bag so you can much them when you get the munchies. They’re healthier and cheaper. Even better, keep a water bottle with you, as drinking water can definitely take the edge off of hunger for a while while also keeping you hydrated.
Rather than buying that tech gadget without really thinking about it, consider seeing if you already have devices that do the same thing, or if a friend has a device that you can borrow. It’s a lot cheaper to borrow a friend’s Switch and play it heavily for a few days, then put it aside for a week, and then just return it to that friend.
Rather than buying new clothes at the expensive shops, trawl some secondhand stores for bargains or, better yet, just dig through your closet, bring stuff from the back to the front, and wearing those newly discovered things.
Rather than going to a bar and getting plastered, invite some friends over to play cards, ask them each to bring a bottle or a six pack, and buy some cheap drinks and snacks from a warehouse club.
You’re cutting out a lot of downsides with each of these choices, including costs, while retaining most of the upsides.
Find pleasure in free things so that the relative expense of costly things is clearer. Again, as I noted earlier, try to cultivate a bunch of free things that you enjoy doing so that you can draw upon that list whenever you feel the impulse to seek a bit of pleasure. My default ones include just kicking back with a book for an hour or going on a hike or playing a board game or eating an apple or drinking some cold coffee.
One of the most successful strategies that humans used in the early days of our history was imitation. If someone had a good technique for acquiring food or water, you were usually doing the right thing to imitate that technique. Imitation was a great survival strategy.
Today, we still instinctively imitate, but we’re surrounded by examples of behavior that isn’t necessarily going to help us build the best life. People around us constantly exhibit bad financial and personal behavior and we’re instinctively driven, at least to an extent, to imitate it. We see beautiful or interesting people on television and strive to imitate them. We see the neighbors doing affluent things and want to imitate them. Often, such behaviors are very financially destructive and not helpful in other areas of life either.
Here are some great strategies for combating imitation.
Cut down on media consumption It’s simple – just watch less television and spend less time online. Find other things to do, particularly things that involve making or creating rather than consuming. If you do want to just consume something, read a book or watch a stage production. Basically, avoid screens.
Media in all its forms offer deep misrepresentation of how other people actually live their lives. Television programs and reality shows offer scripted versions of reality that don’t represent real life in any way. Social media shows only the highlight reels of people’s lives, not showing you the struggles they are going through. They’re terrible sources for imitation, but if you look too much, you’ll subtly strive to imitate.
Spend less time with people who exhibit and encourage poor financial behavior. The people in your lives are also sources for imitation, so actively aim to spend less time with people who exhibit poor financial behavior and encourage you to do the same.
Do you have friends that seem to always have expensive things and don’t hesitate to spend money? It might feel fun to spend time with them and try to imitate that behavior, but the reality is that it leaves your own house in financial ruin.
You don’t need to de-friend or “ghost” these people. Just consciously dial down your time with them and your exposure to them on social media.
What can you do socially instead?
Spend more time with people who exhibit good financial behavior. In other words, look for good people to subconsciously imitate. Hang out with people who love to have potluck dinner parties or go to free community concerts or have game nights at each other’s homes. Look for friends who want to go on camping trips instead of expensive getaways, or spend the day at the beach instead of a private club. Look for friends who have hobbies that can be done for free rather than hobbies that require expensive fees to even participate. Look for friends who do things for fun, not buy things for fun.
It can be tricky to find these friends, especially if that’s not like the people in your social circle, but look around carefully and you might find that they’re already there. If not, make a conscious effort to expand your social circle in new directions. Do things like going to meetups or other community events with the goal of meeting people.
You’ll soon learn that you don’t have to constantly spend money to imitate friends or keep up with the Joneses.
It’s important to remember that the financially smart alternatives to instinctive human behavior discussed in this article are not the default choices most people make. If they were, we wouldn’t live in a world where 80% of Americans live paycheck to paycheck. We wouldn’t have a culture often centered around the endless promotion of the latest and greatest thing. We’re wired for those behaviors because they were incredibly successful in the hunter-gatherer world that humans lived in for hundreds of thousands of years, even though they’re rather self-destructive in the modern world that humans have lived in for perhaps a hundred years.
Work hard to change that. Work to rewire your instincts and provide a good imitation model for the people around you. Not only will this improve your own life, it causes the behaviors to spread via imitation, often in surprising subtle and indirect ways. Choose people in your life that also show an inclination for smart financial choices.
You’ll find that, although it’s tough, it is quite possible to work against your instincts to build a better life, and over the long run, the people who succeed at that will be the ones that set the mold for future generations.
Good luck.
The post Financial Struggle and Human Instinct appeared first on The Simple Dollar.
BOK has serviced the unique home-buying needs of Oklahoma residents for over 100 years and has grown into the largest bank in the state. This lender’s diverse selection of home loans are suited to a wide range of customers, including first-time homebuyers, moderate-to-low income borrowers and those with less than perfect credit.
BOK’s conventional fixed and adjustable-rate home loans feature some of the lowest down payment minimums around, allowing qualified borrowers to put as little as 3 percent down. Homebuyers who are looking for a face-to-face service environment can visit one of the bank’s physical branches or submit an application online and follow up in-person.
The biggest advantage of working with BOK is its impressive variety of mortgage products, which include conventional fixed and adjustable-rate, jumbo, FHA, USDA, and VA loans. They also offer a few unique specialty programs, such as its Native American Home Loans, which are available to members of a federally recognized tribe with down payments as low as 1.25%.
The bank’s Lock and Build Loans are perfect for financing the construction of your dream home, as qualified applicants can lock in a low interest rate for up to 270 days while the house is being built.
Bank of Oklahoma (BOK) can trace its roots back to The Exchange National Bank of Tulsa, which was founded in 1910. The bank changed its name in 1975 and moved its headquarters to a larger facility in Tulsa, Oklahoma, where it resides to this day. Bank of Oklahoma is an owned subsidiary of BOK Financial Corporation, which was acquired by George Kaiser in 1991 from the Federal Deposit Insurance Corporation. BOK Financial operates seven banks with physical branches in eight U.S. states.
BOK provides a diverse selection of mortgage products to its customers in Oklahoma, including conventional fixed and adjustable-rate, jumbo, FHA, VA, and USDA loans. This lender also offers several unique home financing programs for qualified borrowers, such as its Lock and Build mortgages and Native American Home Loans.
This conventional mortgage type features consistent interest rates and monthly payments over the full life of the loan, making it a solid choice for homebuyers that plan to settle down long-term. Most lenders require borrowers to put at least 5 percent down upfront, but BOK accepts down payments as low as 3 percent. Eligible applicants can secure an interest rate as low as 3.875 percent on a one-unit primary residence, though certain restrictions do apply.
Unlike fixed-rate mortgages, this home financing solution is based on a variable rate that annually adjusts to market performance after an initial fixed-rate period. Although this type of mortgage is a bit less stable, it offers incredibly competitive interest rates during the first few years, which may benefit homebuyers that are unsure about their long-term plans. BOK accepts down payments of as little as 3 percent and allows borrowers to use gift funds to cover the amount.
Borrowers looking to purchase an expensive home may benefit from this mortgage option, as BOK supplies jumbo mortgages for up to $3 million. This home loan is the best option for properties that exceed the maximum conforming limits set by the Federal Housing Finance Agency, which stands around $417,000 for BOK’s current service region. Jumbo mortgages can be negotiated as either fixed or adjustable-rate and can be used to purchase a second home or vacation property.
This government-backed loan program is fully insured by The Federal Housing Administration and features some of the lowest available rates. Qualified homebuyers can secure an FHA loan for just 3.5 percent down, even with credit scores as low as 620. This mortgage option is quite popular with first-time homebuyers, but moderate-to-low income borrowers and those with less than perfect credit can also benefit from the program’s flexible eligibility requirements.
The Department of Veterans Affairs created this home loan program to help military veterans and service members secure affordable mortgage rates without having to make a sizeable down payment. This mortgage type comes with a 100 percent financing option and does not require borrowers to obtain mortgage insurance. VA loans also benefit from strict closing cost guidelines, which can significantly reduce the amount homebuyers pay upfront.
Homebuyers interested in rural or suburban properties can take advantage of this flexible mortgage program, which features 100 percent financing options and low credit score requirements. The United States Department of Agriculture created this home loan program to support moderate-to-low income borrowers in less-developed regions of the country, who are often underserved by conventional lenders. USDA loans do not require down payments, though a credit score of 640 is needed to qualify for 100 percent financing.
This specialty mortgage streamlines the home building process by eliminating the need for multiple loans, allowing borrowers to combine construction and long-term financing into a single home loan. Qualified applicants can lock in a competitive interest rate for up to 270 days while their home is being built and are allowed one rate drop within 45 days of the lock expiration if the market index decreases.
Members of a federally recognized tribe may be eligible for this unique mortgage, which is backed by the Office of Native American Programs. This Section 184 home loan benefits from low down payment minimums and some of the most flexible credit score requirements on the market. For example, loans below $50,000 require a down payment of just 1.25 percent, with higher loans maxing out at 2.25 percent down. In addition, BOK charges market rates for this mortgage program, regardless of how low a borrower’s credit score may be.
BOK’s small service region enables it to provide personalized customer service that is tailored to the unique needs of Oklahoma residents, from first-time homebuyers to moderate-to-low income borrowers. This lender operates dozens of branches across the state, with at least three dedicated locations for servicing mortgages. Interested borrowers can submit a home loan application by visiting a branch in-person or applying online. BOK’s website also houses useful resources that can help you understand the mortgage origination process. These resources include timely articles, extensive FAQ pages, mortgage calculators, and a chat feature that can put you in direct contact with a lending agent.
Unfortunately, BOK’s website does not provide rate quotes or general estimates, instead, prompting visitors to fill out a mortgage application to learn more. There is also a surprising lack of specific details about the bank’s mortgage programs, which may make it difficult to gather information and compare your options. Homebuyers looking for an online lending experience may find BOK’s website a bit lacking, though it’s wealth of free resources may benefit first-time homebuyers who are unfamiliar with the application process. This lender advertises a “21 day ready to close” origination period but does not guarantee a short turnaround on every mortgage application.
BOK has been in business for over 100 years and is considered the largest bank in Oklahoma. The Better Business Bureau has reviewed over 50 branches operated by BOK and awarded every location an A+ BBB rating, though formal accreditation is still forthcoming. The bank’s parent company, BOK Financial, ranked 79th in Forbes’ Top 100 American Banks list for 2018. Bank of Oklahoma is a Member FDIC Equal Housing Lender.
|
Loan Type |
Rate Type |
Down Payment Requirements |
|
Fixed-Rate Loans |
Fixed |
3% |
|
Adjustable-Rate Loans |
Variable |
3% |
|
Jumbo Loans |
Fixed or Variable |
5 – 10% |
|
FHA Loans |
Fixed or Variable |
3.5% |
|
VA Loans |
Fixed or Variable |
0% |
|
USDA Loans |
Fixed |
0% |
|
Lock and Build Loans |
N/A |
N/A |
|
Native American Home Loans |
N/A |
1.25% or 2.25% |
Eligibility guidelines for each of BOK’s diverse mortgage offerings vary, though there is some overlap with its conventional home loans. Fixed and adjustable-rate mortgages can be secured with low down payments of 3 percent, which is well below the industry average. Even the FHA program, which was designed to accommodate homebuyers who are unable to make large upfront payments, requires 3.5 percent down. This suggests that BOK is committed to supplying flexible financing options to Oklahoma residents.
Borrowers looking to put down as little as possible may benefit from a VA or USDA mortgages, as both feature a 0 percent down payment minimum for those who qualify. In terms of credit score, BOK’s FAQ pages mention a FICO score of 680 as the threshold for getting “A” credit loans. While the bank does consider applicants with lower FICO scores, landing the best available rates will depend on whether you have an established credit history. It is unclear whether BOK considers non-traditional credit histories, so be sure to contact a lending agent for more information.
Although BOK’s website is packed with useful information, there is a surprising lack of concrete details for many of its home loan products. For example, the bank’s website does not provide any info on loan term options for its mortgages. On the other hand, BOK does discuss the impact of loan-to-value criteria, which is something many lenders shy away from.
BOK’s website also goes into significant detail about how debt-to-income ratio can affect your interest rate, commenting that front-end and back-end debt ratios should be no higher than 28 percent and 38 percent. Homebuyers interested in learning more about BOK’s government-backed programs can access additional information through the corresponding agency’s website or by contacting a lending agent directly.
Homepage URL: https://ift.tt/2TMXvma
Company Phone: 1-918-588-6000
Headquarters Address: BOK Tower, PO Box 2300, Tulsa, OK 74102-2300
The post Current BOK Mortgage Rates Reviews: Today’s Best Analysis appeared first on Good Financial Cents®.
