Latest news with #lenders
South China Morning Post
12 hours ago
- Business
- South China Morning Post
Why is Hong Kong law soft on predatory lending and debtor harassment?
Feel strongly about these letters, or any other aspects of the news? Share your views by emailing us your Letter to the Editor at letters@ or filling in this Google form . Submissions should not exceed 400 words, and must include your full name and address, plus a phone number for verification The issue of licensed moneylenders in Hong Kong engaging in illegal practices demands urgent attention. While some operate within legal boundaries, others exploit borrowers with extortionate interest rates and coercive collection tactics, often skirting the law. What is deeply concerning is how society and even the authorities appear to have normalised these practices to an extent reminiscent of Stockholm syndrome. When lenders are not overtly harsh, their actions are often deemed acceptable, as if civility excuses illegality. This mindset must change – what is wrong is wrong, regardless of the lender's demeanour. The Money Lenders Ordinance is outdated and ill-equipped to address current predatory practices. Interest rates, sometimes effectively exceeding 48 per cent, trap borrowers in cycles of debt, particularly those in vulnerable situations who are not familiar with local lending practices. Many borrowers are willing to repay loans if terms are fair and collection methods lawful. Yet, the lack of stringent caps on interest rates and the weakness of enforcement against illegal practices enable exploitation to thrive.
Yahoo
13 hours ago
- Business
- Yahoo
Mortgage Applications Rise Even as Key Rate Hits 4-Week High
Mortgage applications in the US increased last week even as the 30-year fixed rate on conforming loa
Yahoo
19 hours ago
- Business
- Yahoo
Bank of America authorizes $40 billion stock repurchase plan
(Reuters) -Bank of America said on Wednesday its board has authorized a $40 billion stock repurchase program. The new buyback program, which will take effect on August 1, will replace the current authorization, which had about $9.1 billion in repurchases remaining as of June 30, the bank said. The biggest U.S. lenders have enough capital to withstand a hypothetical severe economic and market turmoil scenario, the Federal Reserve said last month. Sign in to access your portfolio
Yahoo
a day ago
- Business
- Yahoo
Refinancing your ARM into a fixed-rate mortgage
Key takeaways If you're nearing the end of your ARM loan's initial fixed-rate period and your rate will rise significantly, you might be considering refinancing to a fixed-rate mortgage. A fixed-rate mortgage provides more predictability, as the interest rate and your monthly payment stay the same for the loan's duration. You'll need to meet ARM refinance requirements to apply, and it's a good idea to compare offers from multiple lenders — not just your current lender. If you're nearing the end of the initial term on your adjustable-rate mortgage (ARM), you might be wondering if now is a good time to refinance to a fixed rate. Here, we break down how to refinance an ARM and when it's a good idea to refinance to a fixed rate. Can you refinance an ARM loan? Yes, you can refinance an ARM loan. By doing so, you'll replace your existing mortgage with a new one — it can be either another ARM or a fixed-rate mortgage. A fixed-rate mortgage is a home loan with an interest rate that stays the same for the entire loan term, usually 15 or 30 years. This means your monthly principal and interest payments never change, which can make payments easier to plan for. Shop Top Mortgage Rates Personalized rates in minutes A quicker path to financial freedom Your Path to Homeownership With an ARM, many people choose to refinance due to their rate adjusting higher. However, it's important to remember that refinancing isn't free — you'll have to pay closing costs. So, even if you're refinancing to a much lower rate, it's smart to calculate your break-even point to determine when you'll start saving money. Keep in mind: You don't have to stick with your current lender when refinancing an ARM. Be sure to shop around to get the best rates and terms. How to refinance an ARM Refinancing an ARM is very similar to refinancing a fixed-rate mortgage. Here are the basic steps to follow: Compare quotes: Don't just refinance with your current lender without shopping around first. Research multiple lenders and get quotes on rates, fees and terms that you can compare to find the best offer. Choose a lender and apply: Gather all of your financial documents and submit the paperwork and application to the lender of your choice. Schedule the appraisal: Like most mortgage loans, refinances generally require a home appraisal. Go through underwriting and close: The lender's underwriting process will verify your finances. Once everything is in order, assuming your loan is approved, you'll schedule a closing date to sign the paperwork and pay the closing costs. Lenders typically offer specific mortgage refinancing loans, so you'll use their refinance application form to apply. The fact that you already own the home can simplify the process. Requirements for refinancing an adjustable-rate mortgage Before you start the process, make sure you meet the requirements. The specific criteria may vary by lender, but here are some common requirements to refinance a mortgage, whether to another ARM or a fixed-rate loan: Credit score: Conventional loans generally require a credit score of at least 620. DTI ratio: To refinance, your debt-to-income ratio should be below 50 percent. Equity percentage: You typically need to maintain a minimum of 20 percent equity (though some lenders will allow less). Duration of ownership: In most cases, before a mortgage can be refinanced you'll need to make at least six payments on the loan — meaning you need to have lived there for at least six months. Learn more: ARM loan requirements in 2025 Costs of refinancing an ARM Remember: Refinancing isn't free. Before switching from an ARM to a fixed-rate loan, make sure you understand how much it costs to refinance a mortgage. You'll need to budget for a number of expenses, including: Origination fee Appraisal fee Title services On the plus side, refinancing costs often total far less than the closing costs on a home purchase loan. While many of the costs are fairly similar, you'll skip a few when you refinance. For instance, you won't be paying for a home inspection, and you likely won't need to pay for an attorney. Similarly, unless you're tapping equity, some fees will be lower since they're calculated as a percentage of the loan amount. Benefits of refinancing an ARM to a fixed-rate mortgage Fixed-rate mortgages keep the same mortgage rate throughout the entire loan term. ARMs are more complex: An ARM is a 30-year loan with a fixed rate for an introductory period (typically three to 10 years). After this period, the rate adjusts every six months or once per year, based on a specific market index. While ARMs may offer an initial lower rate than a fixed-rate loan, once that introductory rate ends, your payment can go up significantly. Here are the main benefits of refinancing an ARM to a fixed-rate mortgage: Your payments are always the same: A fixed-rate mortgage gives you the certainty of predictable payments. Rather than wondering how the market and economic trends will impact your adjustable rate — and consequently your monthly payments — you can rely on a consistent cost that won't change over the course of the loan. You can budget more easily: With a fixed-rate loan, the stable sum you put toward your major housing cost allows you to more effectively budget for the other expenses in your life, both now and in the future. You still have options: If a 30-year mortgage sounds like a lifetime, you can also look at a 15-year fixed-rate mortgage. The interest rates on this type of loan are even lower than the rates for a 30-year fixed loan, but the tradeoff is that you'll have higher monthly payments due to the accelerated timeline. Downsides of refinancing an ARM Refinancing an ARM to a fixed-rate mortgage isn't always the right choice. Here are some of the potential drawbacks to consider: You'll need to pay closing costs: Even though closing costs on a refinance are typically lower than a purchase loan, they can still cost thousands — and reduce (or delay) the benefits you'd expect from refinancing. You might lose out on savings: If you refinance to a fixed-rate loan and rates drop, you won't see any of the interest rate savings you would have gotten on your ARM. It could take longer — and cost more — to repay your mortgage: If you extend your loan term as part of the refinance, you could end up paying more in interest over the life of your mortgage. Plus, it'll delay your payoff date. Should you refinance an adjustable-rate mortgage (ARM) to a fixed-rate mortgage? Can you refinance an ARM loan? Sure. But should you? Today's high mortgage rates might make this less appealing if your ARM originated back in the pre-pandemic days. 'It's possible for borrowers who got their ARM five years ago to still have a lower monthly payment and pay less in interest during the first year or two of rate resets than what they would pay on a new mortgage at today's rates,' says Austin Kilgore, analyst for lender Achieve's Center for Consumer Insights. And there are limits to the increases, too. 'While interest rates are significantly higher today than they were five years ago, the rate resets on an existing ARM have both an annual cap, typically 1 to 2 percent per year, and a maximum cap, typically 5 to 6 percent over the life of the loan,' he adds. On the other hand, if your introductory rate is about to end, refinancing might make sense — the rate jump you might experience could be a shock. If you can secure a lower rate on a fixed-rate loan than the rate your ARM is about to adjust to, choosing to refinance an ARM to a fixed rate could be a smart move. How to decide to refinance To find out whether refinancing your ARM loan would be beneficial, consider the following: Your credit score: You need a great credit score to get the best interest rate. 'Someone coming up on the end of an ARM presumably has five or more years of timely mortgage payments on their credit history,' says Kilgore. 'There's a good chance their credit score is better now, and they may qualify for something better.' If your score needs some work, however, you may want to wait. Your financial goals: Before applying, determine why you want to refinance. For instance, do you want to pay off your mortgage sooner, have a more predictable payment or cash in some of your equity for home improvements or debt consolidation? Your long-term plans: How long do you intend to stay in the home? Weigh that against your ARM timeline. For example, if you only plan on staying in your home for a few more years and your ARM won't reset until after that, it might make sense to stick with your current loan, since you may not save enough to make refinancing worth it. Your ability to afford closing costs: Refinance closing costs can run anywhere from 2 to 6 percent of your mortgage principal. That means, for a $300,000 mortgage, you may pay $6,000 to $18,000 in closing costs. You can roll these into your mortgage with a no-closing-cost refinance, but if you do that, remember that you'll pay interest on them. FAQ What is the most obvious disadvantage of an ARM? The main disadvantage of an ARM is that your interest rate can increase after the introductory period ends — and can change again every six months or every year going forward. If the rate goes up, you'll have to put more money toward your monthly mortgage payments, which might mean putting other financial goals on hold or cutting back in certain areas of your life. What happens if the interest rate on an adjustable-rate mortgage loan goes up? If the interest rate on an ARM goes up, your monthly payment will also increase — and you'll end up paying more interest over the life of your loan. When should you refinance to an ARM? Refinancing to an ARM might make sense if you want a lower rate right now — especially if you plan to sell your home in the next several years (or at least before the introductory period ends). You might also consider this option if you need more affordable payments now, but you'll be able to handle larger ones down the road — when you go to work after getting a grad school degree, for example. You can also refinance an ARM to another ARM if you like, as long as you meet the lender's requirements.
CBS News
a day ago
- Business
- CBS News
What's the minimum payment on a $2,000 credit card balance?
Carrying a balance on your credit card is far from unusual these days. With prices climbing due to sticky (and rising) inflation, more people are leaning on plastic to cover everything from their everyday expenses, like groceries and rent, to their unexpected bills. That, in turn, has made it more difficult for many cardholders to get rid of any credit card debt they have, and today's nearly 22% average credit card rates are only compounding the issue. But if you're feeling the financial pressure from carrying a credit card balance in today's high-rate, inflationary landscape —let's say $2,000 in this case — and wondering how much you absolutely have to pay this month to stay current, the answer might surprise you. Your credit card minimum payments are designed to keep your account in good standing, but they're not necessarily your ticket to becoming debt-free anytime soon. So, what exactly is the minimum payment on a $2,000 credit card balance right now, and what should you know before making that payment? That's what we'll examine below. Find out what credit card debt relief options are available to you today. Credit card issuers use different formulas to determine your minimum payment each month. While the calculation methods vary slightly from one company to the next, they all share one thing in common: They're designed to keep your account in good standing while ensuring the lender earns interest. Here are the most common ways credit card minimums are calculated: To better understand how these calculations work, let's crunch the numbers for a $2,000 balance at an APR of 22%. Flat percentage of your balance (2%): Percentage plus interest and fees (1% + interest): Flat dollar minimum ($35) Many issuers set a floor for minimum payments. With a $2,000 balance, you'd likely pay more than $35 because the percentage-based formulas apply to higher balances. Interest-only minimum Learn how to get rid of your credit card debt for less now. Making only the minimum payment each month might feel like it's giving you some financial breathing room, but it's an expensive habit to fall into. Credit card interest compounds, meaning that over time, both your principal balance and the interest charges accrue more interest, so the longer you carry a balance, the more in total interest you rack up. On the other hand, adding even a little extra to your payment each month can shave years off your repayment timeline. The more principal you pay down early, the less interest you'll owe in the long run. Paying more than the minimum isn't always feasible, though. If you're struggling to pay more but want to get rid of your debt, you may want to consider these debt relief strategies: The minimum payment on a $2,000 credit card balance might be as low as about $40 to $60, depending on your issuer. But while paying that amount keeps you in good standing, it's not a strategy for getting out of debt quickly or cheaply. To avoid years of payments and high interest, aim to pay as much above the minimum as you can. And if your balance feels overwhelming, explore your debt relief options to regain control before your debt situation worsens.
