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Sean Talks Money: Happy First Birthday, Chip Cards … Right?

One year ago this month, EMV technology arrived in the U.S. credit card market — kicking and screaming, some critics may add. Just like a newborn baby, these new “chip cards” have upset our habits, placed extra demands on our time and elicited all kinds of opinions on how to deal with the change.

But ultimately we’re glad we made the plunge … right?

Evidence is showing that these chips are indeed making credit card transactions safer, and a recent NerdWallet survey found that most consumers view the switch positively. Plus, the technology has opened the door to faster and more convenient payment options in the future.

Why did we make the switch?

Before EMV, if bad guys wanted to clone your credit card, all they had to do was make a copy of the data on the magnetic stripe of your card and write that information onto another “magstripe,” like one found on a hotel key card. Fraudsters could then swipe the cloned card at a store and — as long as the cashier didn’t ask for ID or confirm the signature — they could buy stuff on your account.

Banks have tried for years to stop this practice by building internal algorithms that learn how and where you spend your money, so they can flag any purchases that deviate from your norm, but their systems aren’t perfect. Just last year a fraudster made a copy of my card and spent $2,600 at Saks Fifth Avenue in New York. Although my bank, Chase, approved that transaction, it recognized something was fishy and asked me to verify after the fact. I informed Chase that I hadn’t made the purchase and the charges were removed. The fraudster walked away with the goods, Saks was paid, and Chase wrote it off as a $2,600 fraud loss on its books.

EMV technology was developed by Europay, MasterCard and Visa (hence the name) to prevent this kind of fraud. The chip in your credit card basically creates a one-time-use payment code, also called a cryptogram, each time you dip your card in a card reader. That way, if your card information were to be stolen, thieves wouldn’t be able to use it to create a fraudulent card.

I should note that the birthday we’re celebrating is not about the invention of this technology. EMV is more than 20 years old and has been implemented in most European countries for over a decade. We’re marking the one-year anniversary in the U.S. of the rather ominous-sounding “liability shift,” meaning the liability for counterfeit fraud has moved from the bank to whichever party failed to upgrade to EMV, whether it’s the bank or the merchant. This pressured banks to issue chipped cards and merchants to upgrade their payment terminals to be chip-ready.

For instance, in my experience with Chase, if there had been a chip in my card, in addition to the traditional magstripe, and Saks hadn’t been able to accept EMV, the retailer would have been on the hook for the $2,600 fraudulent purchase instead of Chase.

How’s it going?

If you’ve heard the grumbling yourself — particularly on social media — you know that most of the complaints about EMV fall into two camps: One set highlights the annoyance of not knowing whether to swipe or dip, which arises when the point-of-sale device has a disabled EMV slot. The other set of complaints focuses on the slower processing time.

Here are a few gems:

“Can you put your card in the chip reader please” ya hold on let me cancel my plans for the rest of the day — Christian Delgrosso (@christiand) July 24, 2016 The #Chipcard has vastly improved my customer experience. It includes my 3 fave hobbies: waiting, staring and then swiping it anyway. — Jon Gamble (@JustJonnyG) July 30, 2016 In the countless transactions I’ve now used my chip card, I’ve literally NOT ONCE made the correct 50/50 guess whether to swipe or insert it — Marnie Shure (@marnieshure) July 26, 2016

But the dissatisfaction over the switch to EMV appears to be overblown. According to the NerdWallet survey, nearly four in five respondents have positive feelings about chip cards, and almost half say that consumers benefit from the technology.

Still, the conversion is taking time. MasterCard says 88% of its credit cards are chip-ready, but only 33% of all payment terminals in the U.S. are ready to accept chip payment. According to Visa, 84% of the merchants that haven’t upgraded are working on the switch. Based on adoption rates in other countries, Visa expects 90% merchant acceptance in the U.S. in four to five years.

So if we’re making progress, why are there so many complaints? I think the root problem is pretty simple: We’re not used to technology slowing things down. Instant messaging, Uber and email all came with immediate speed benefits. EMV, while technologically superior, is so far running against that norm.

“This is the biggest thing that has happened in terms of consumer experience at point of sale since the past 25 to 30 years, in a scale this big,” says Chiro Aikat, senior vice president for product delivery at MasterCard. “Change is neither good or bad; it’s change.”

What’s next?

When we think about the immediate future of payments, there’s good news.

First, EMV is likely to improve. As more merchants switch to the technology, we can expect a more consistent experience across stores.

Second, efforts are underway to improve processing speed. Take Visa’s new Quick Chip technology — basically a “much more efficient form of EMV,” according to Stephanie Ericksen, vice president of risk and authentication products at Visa. This technology works entirely on the back end, meaning we don’t have to worry about facing yet another round of new chip cards or terminals. Quick Chip allows consumers to insert their card at any time while the cashier is still bagging. It generates the cryptogram faster and allows the card to be removed in about two seconds or less, she says.

“It feels much more like a magstripe experience,” Ericksen says.

We can expect Quick Chip — and MasterCard’s equivalent M/Chip Fast — to be rolled out over the next couple of years. Ericksen says the technologies are much easier for stores and their card issuers to implement than the EMV standard and don’t require new hardware.

(Note: Some readers have asked me why U.S. transactions remain slower than those in Europe. Many European card transactions are processed “offline” — meaning the point-of-sale device is not connected to the internet, and the chip in the card is able to approve the transaction without needing to communicate with the processor or consumer bank. In the U.S., we tend to have “online” transactions — each one is approved by the consumer bank, which requires more time. The technology behind Quick Chip and M/Chip Fast essentially mimics an offline transaction.)

Third, we can expect to see more tap-and-pay, or “contactless,” payment options — based on near-field communication (NFC) technology — in the near future.

“None of the point-of-sale manufacturers are shipping terminals that aren’t already ready for a contactless transaction,” says Jack Jania, senior vice president of strategic alliances at the chipmaker Gemalto.

This expected ubiquity of contactless options will enable wider use of mobile payments and will also facilitate more contactless card payments, which have just barely been introduced in the U.S.

But payment evolution may also happen beyond improvements in card-based technologies. Perhaps stores may experiment with their own payment experiences in apps, focused on convenience or loyalty. Starbucks, for instance, has struck gold with its app, which deftly combines loyalty and payment options, and I expect more merchants to try to match this experience. Retailers may also try to match the ease of Uber’s checkout, which happens silently and instantly when the customer steps out of the car.

One change that doesn’t appear to be on the immediate horizon for the U.S.? Chip-and-PIN credit cards, such as the ones in Europe, which require a PIN instead of a signature. Why? Blame it on cost and habit.

Switching to PIN acceptance for credit cards is estimated to cost issuers more than $2.6 billion to implement while saving them only $850 million over five years in fraud prevention. And it’s unclear whether cardholders are ready to tackle chips and PINs simultaneously. As fraud analyst Julie Conroy with the Aite Group noted, quoting a card issuer: “We don’t really think we can teach Americans to do two things at once. So we’re going to start with teaching them how to dip, and if we have another watershed event like the Target breach [in 2013] and consumers start clamoring for PIN, then we’ll adjust.”

Bottom line for EMV

All in all, I think this is a happy birthday for EMV. Yes, it’s caused some disruption and made us lose some sleep, but we’re better for it. Counterfeit fraud has dropped 54% at merchants that have made the switch or are close to completing it, according to the latest data from MasterCard, so something apparently is working.

Progress is still slow and clunky, but there’s a bright future, considering how the EMV upgrade is setting the stage for more technologies to flourish.

So happy birthday, EMV. Almost no one wanted you, but we’re glad you’re here.

Sean McQuay is a credit cards expert at NerdWallet. A former strategist with Visa, McQuay now helps consumers use their credit cards more effectively. If you have a question about credit, shoot him an email at The answer might show up in a future column.

The Low Down on New Low Down Payment Mortgage Programs

Potential homebuyers who can’t quite pony up the traditional 20% down payment have often had FHA loans as an alternative. But some lenders are shying away from these loans for legal and regulatory reasons.

Over the past few months, those same lenders have begun filling the gap with their own low down payment loan products. Some require mortgage insurance, similar to FHA loans. The premiums you pay protect the lender in case you default.

Here’s what you need to know about the low down payment programs from major lenders.

3 is the new 20

It seems 3% down is the new magic number for most lenders. That’s because Fannie Mae and Freddie Mac, the government-sponsored enterprises that provide capital to the mortgage market, will buy loans with 97% financing.

Wells Fargo’s yourFirst Mortgage offers fixed-rate mortgages with as little as 3% down, allows borrowers to use down payment assistance programs and offers incentives to participate in homebuyer education.

The program’s loans are available to low- and moderate-income individuals with FICO scores of 620 or better. Wells Fargo evaluates credit using nontraditional sources, such as tuition, rent or utility bill payments. It also considers the income of others who will live in the home, such as family members or renters. The mortgages do require mortgage insurance.

JPMorgan Chase has a similar program called Standard Agency 97%. It doesn’t have a snappy name, but it, too, allows customers to put just 3% down if they have FICO scores of 680 or better. Borrowers must carry mortgage insurance.

How low can you go?

Quicken’s 1% Down Program beats them all in the race to the bottom. The lender actually gives consumers 2% grants to make up the difference.

“This product was designed to remove one of the most common barriers in the way of potential homebuyers — a large down payment,” says Bill Banfield, vice president of capital markets at Quicken Loans. “First-time buyers and minorities are two groups commonly affected by these requirements, but a 1% down program can help many groups.”

Borrowers must have a 680 FICO score or better, earn less than the median income for their county, and carry a debt-to-income ratio of 45% or less.

As appealing as these programs may be, they all require mortgage insurance. And remember, that’s something you pay for even though it protects the lender. But users of these programs don’t have to pay mortgage insurance premiums upfront, and they can cancel the policies once their home values reach a certain equity target, unlike FHA loan recipients.

However, we did find two loan programs that remove that pay-to-play provision.

Low down payments and no mortgage insurance

Bank of America’s Affordable Loan Solution is one. It’s a fixed-rate mortgage program for low- and moderate-income homebuyers, allowing down payments as low as 3%. You must have a FICO credit score of 660 or higher, and maximum income and loan amount limits apply, which vary by location.

And Citibank’s HomeRun Mortgage permits as little as 3% down and offers up to $5,000 in assistance with closing costs. There’s also an “on-time closing guarantee.” Income and loan limits apply by location.

As usual, there are no free rides. Lenders that don’t require mortgage insurance almost certainly charge higher mortgage interest rates. So it always pays to shop around.

Making a down payment of less than 20% on a home is a complicated financial decision, but if it’s something you’re considering, you have options.

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @halmbundrick.

This article was written by NerdWallet and was originally published by Redfin.

Why You Shouldn’t Be Spooked by Student Loans

If you’ve heard common student-loan horror stories, you might think that borrowing for school will leave you owing six figures, facing arrest for failure to pay and shackling your family to your debt even if you die.

But those are extreme cases. Student loans are a smart career investment as long as you borrow in moderation and graduate.

In the media: Ghoulish debt examples

Your perception of the normal amount of student debt might be skewed by what you see in the media. Outlets tend to feature borrowers who carry higher than average debt loads, according to a 2014 analysis of nearly 100 news articles by the consulting firm Hamilton Place Strategies.

Borrowers cited in the analyzed articles — some of whom were pursuing postgraduate degrees, according to the analysis’s co-author Matt McDonald — reported owing $85,400 in student loans on average.

Typical debt loads are much lower: The average student graduating with a bachelor’s degree in 2015 owed $30,100, according to the Institute for College Access and Success. That amount of debt is more manageable, especially if you’ll earn at least that much per year. Even paying just the minimum due on the standard federal repayment plan, which would be about $334 per month with a 6% interest rate, you’d eliminate your debt in 10 years. To pay it off faster and save money in interest, you can always pay more than your monthly minimum.

Student debt isn’t a dungeon

Keep in mind that a degree typically increases your earnings potential. Higher student debt levels are correlated with higher incomes, according to economist Sandy Baum in her 2016 book, “Student Debt: Rhetoric and Realities of Higher Education Financing.”

“Relatively affluent households carry a disproportionate amount of the outstanding student debt,” Baum writes. “Education borrowing is improving many more lives than it is damaging.”

Still, it’s important to borrow in moderation and graduate.

The importance of graduating is straightforward: If you don’t graduate, you don’t benefit from having a degree, but you still have to pay for it.

Borrowing in moderation generally means taking on less total debt than you expect to earn in your first year after college. Use the Bureau of Labor Statistics’ Occupation Finder and the Department of Education’s College Scorecard to research the amount you can expect to earn based on your job and school.

There are student loan ‘antidotes’

Even if you borrow responsibly, graduate and get a decent-paying job, paying back student debt can be painful. Thankfully, there are several ways to reduce the sting:

  • Income-driven repayment plans tie your federal loan payments to your earnings. If you don’t earn enough, you won’t have to pay anything. However, you’ll pay more in interest, because you’ll be making payments for 20 or 25 years instead of the standard 10.
  • Student loan forgiveness programs, such as Public Service Loan Forgiveness, wipe out your remaining federal loan balance after you make qualifying payments for a certain number of years.
  • Student loan refinancing can lower your interest rate, which decreases the total amount you owe and can help you pay off your debt faster. But if you refinance federal loans, you can’t access repayment plans and forgiveness programs.

Armed with these strategies for managing student debt, you can save your screams for the haunted house this Halloween.

Teddy Nykiel is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @teddynykiel.

Trump vs. Clinton: What the Election Means to Investors

By Eric Toya

Learn more about Eric on NerdWallet’s Ask an Advisor

If you’re like most people, you can’t wait for this presidential election be over. Then your Facebook feed will finally go back to photos of kids, puppies and food. Until then, you get mudslinging.

Every election year, we’re worn out by the bickering campaigns, the endless commercials and mailers and that crazy uncle who wants to turn every family event into a debate. But politics aside, many Americans are concerned about what the next president will mean to them and their family’s financial future.

The most immediate and visible concern is how the stock market will react. Investors want to know what to do with their money depending on who wins.

Presidents and the market

The common perception is that business-friendly Republicans are better for the stock market, but the data show otherwise. According to various sources, the stock market has delivered returns of 3 and 8.2 percentage points higher when a Democrat is in the White House.

There’s your answer, right? If Hillary Clinton wins, go all in. If Donald Trump pulls off the upset, run for the hills. In the words of college football analyst Lee Corso, “Not so fast, my friend.”

Research consistently shows that the stock market performs better under Democrats, but this is hardly a reason to start timing the market. GOP White Houses are still positive for the market. In fact, going back to Herbert Hoover in 1929, the stock market had gains in seven out of 10 Republican presidential terms. Plus, correlation doesn’t necessarily prove causation. Just because returns were better under Democrats doesn’t mean it was because they were Democrats.

What not to do

So what should you do with your investment portfolio when we find out who wins? “Don’t do something, just stand there,” as legendary investor John Bogle says.

Research has shown that investors who trade more frequently experience worse returns. Instead, focus on maintaining a long-term investment plan that includes proper diversification, the right amount of risk for your goals and time horizon, systematic rebalancing and smart tax strategies.

Of course, that’s easier said than done. According to a 2012 study on investment decisions and the political climate, investors often “do something” after elections, and what they do depends on their political preferences. “Individuals become more optimistic and perceive the markets to be less risky and more undervalued when their own party is in power,” the study notes.

Buoyed by their party’s victory, investors added riskier assets, such as value and small-capitalization stocks, to their portfolios. The result was that investors who favored Democrats experienced better returns when a Democrat was in the White House, while Republican investors saw better returns with a Republican president.

These results shouldn’t be shocking, since taking on greater risk can lead to greater rewards. Data compiled by New York University shows that from 1928 to 2015 U.S. stocks, measured by the S&P 500, earned an average annual return of 9.5%. During the same period, virtually risk-free short-term government bonds earned 3.45%. The difference — 6.05% per year on average — is known as the risk premium, the additional return that investors earned for taking on more risk. However, once adjusted for the additional risk, their returns weren’t significantly better.

Long-term plan

So investors did tend to do better when their party was in power, but they increased the level of risk in their portfolios to do so, potentially straying from their plans. The amount of risk you take on should be based on your goals and personal risk tolerance, not which political party you like better. Any shifts in your portfolio should be based on a sound long-term financial plan.

When the election is finally over, know that the performance of your portfolio depends less on who wins and more on how you respond to who wins. By focusing on the things that you can control — maintaining discipline and a long-term focus — you’ll be the winner this time.

Eric Toya is director of wealth management at Navigoe in Redondo Beach, Calif.

Microloans for Your Small Business: 13 Top U.S. Microlenders

What is a microloan, and is one right for your small business?

If you’re a small-business owner on a quest for capital, there are several smart reasons to turn to nonprofit microlenders. These lenders go beyond making small loans to entrepreneurs and provide some benefits that traditional lenders don’t:

  • Profit is not their objective. Many microlenders are called mission-focused or mission-based lenders. They offer loans from government or nonprofit programs geared to helping disadvantaged communities, including areas that are struggling economically. Some microlenders also operate internationally, helping entrepreneurs in developing nations.
  • Microlenders typically offer loans of $50,000 or less to startups and other small-scale operations. Some make bigger loans to more established businesses.
  • Many microlenders and nonprofits provide pro bono consulting and training, including helping small businesses build credit.
Good options for nonprofit financing

Top U.S. microlenders by loan volume

SBA Microloan Program lenders

Other notable nonprofit microlenders

Below, we list 13 sources for nonprofit financing. They include the top lenders based on information from two major small-business institutions, the U.S. Small Business Administration and the Aspen Institute, a Washington, D.C.-based policy and educational research nonprofit.

When considering these lenders, keep in mind that microloans have limitations. Because many nonprofits rely on grants, donations or government guarantees or allocations, the number of loans they offer and the amount you can borrow are limited. Funding constraints can also mean strict borrower requirements. And many nonprofits operate only in specific states or regions.

Nonprofit microlenders are also grappling with a major trend in small-business financing: the rapid rise of online lending. It offers quicker but usually more expensive access to cash, says Steven Cohen, president of Excelsior Growth Fund, a New York-based community development lender.

“You see a lot of businesses trading off speed and efficiency for cost,” he says. “But you also see an incredibly crowded marketplace where there isn’t a whole lot of transparency. Nonprofits have the challenge of getting the word out there that, ‘We’re here. … We’re more affordable.’ ”

Top U.S. microlenders

The Aspen Institute’s FIELD program runs the U.S. Microenterprise Census, which collects data from microlenders across the country. Here are the top five microlenders by total loan amount disbursed, according to the program’s 2014 survey, the most recent data available.

Grameen America

Grameen America is affiliated with the Grameen Foundation, an international organization known for programs that help poor communities address their own needs. Grameen America has disbursed more than $490 million in loans to tens of thousands of women in the U.S. The organization has a nontraditional lending system: Borrowers must form a group with four other women they trust. That group then participates in a week of financial training, at the end of which each member opens a savings account and receives a $1,500 microloan to build a small business.

Microloans disbursed in 2014: $100.7 million


San Antonio-based LiftFund offers microloans in the southern U.S., including Texas, Georgia and Florida. Borrowers typically use the financing to buy equipment and supplies. The microloans are also meant to help small-business owners improve their credit and more likely to qualify for a bank loan in the future, the lender says on its website. LiftFund got a boost in October 2016 when JPMorgan Chase & Co. announced almost $5 million in funding for its new small-business loan program in New Orleans, Atlanta, Dallas, Houston, San Antonio and Austin, Texas.

Microloans disbursed in 2014: $18.7 million

Opportunity Fund

California-based Opportunity Fund has been serving residents of the state since 1994, with more than $160 million in microloans. Its borrowers have a median household income of $31,000 per year. Around 90% are minority-owned businesses, and about 30% are women-owned businesses. Opportunity Fund also provides financial literacy education to business owners.

Microloans disbursed in 2014: $17.7 million

Accion New Mexico

Accion New Mexico offers small-business loans from $1,000 to $1 million in New Mexico, Arizona, Colorado, Nevada and Texas. The nonprofit also provides business counseling and marketing support and sponsors educational events. It’s part of the Accion U.S. Network, which also has major chapters in New York, Chicago and San Diego. The international Accion nonprofit offers financing services and assistance, including microloans, in 32 countries.

Microloans disbursed in 2014: $8.9 million

Justine Petersen

Justine Petersen, which is based in St. Louis, offers small-business loans, typically of less than $10,000. The nonprofit also finances businesses in rural areas through the U.S. Department of Agriculture Intermediary Relending Program and originates loans of up to $150,000 as part of the SBA’s Community Advantage Program.

Microloans disbursed in 2014: $8.4 million [Back to the top]

Top SBA nonprofit lenders

Aside from its signature 7(a) term loans, the SBA issues low-cost small-business financing through a network of nonprofits.

The SBA Microloan Program offers loans of up to $50,000 administered through community-based nonprofit groups. The SBA Community Advantage Program offers loans of up to $250,000 in communities that historically have had limited access to capital. The federal agency guarantees up to 85% of Community Advantage financing.

Here are the top five nonprofits in the SBA programs based on total loan amount disbursed to small businesses in 2015, the most recent data available:

CDC Small Business Finance Corp.

CDC Small Business Finance Corp. offers different types of financing for new and expanding businesses in California, Arizona and Nevada, including SBA Community Advantage loans of between $20,000 and $250,000. It also issues SBA commercial real estate loans, known as the SBA 504 loans, for clients planning to buy an existing building or build a new facility.

SBA Community Advantage and microloans disbursed in 2015: $11.7 million

Valley Economic Development Corp.

Valley Economic Development Corp. specializes in small-business loans and microfinancing for entrepreneurs who don’t qualify for loans from traditional banks. It’s based in Los Angeles but also operates in other states, including Nevada, Illinois and New York. Aside from the SBA Community Advantage program, it participates in other small-business financing programs, including the Goldman Sachs 10,000 Small Businesses, the National African-American Small-Business Loan Fund and the National Microfinance Network.

SBA Community Advantage and microloans disbursed in 2015: $9.7 million

Empire State Certified Development Corp.

Empire State Certified Development Corp. is part of the New York Business Development Corp., a major SBA lender. It was the top SBA Community Advantage lender in 2014. Empire State CDC also participates in the SBA commercial loan program.

SBA Community Advantage and microloans disbursed in 2015: $7.6 million

Main Street Launch

Main Street Launch, previously known as OBDC Small Business Finance, serves clients in the San Francisco Bay Area. It provides small-business loans of $10,000 to $250,000 that can be used for such expenses as equipment purchase, inventory or working capital.

SBA Community Advantage and microloans disbursed in 2015: $7.4 million


LiftFund, listed above among top U.S. microlenders, also offers SBA Community Advantage loans of $50,000 to $250,000 to businesses in low- to moderate-income communities in 13 states. Business owners can also qualify if more than 50% of their full-time workforce is low-income or if their employees live in areas designated as low- to moderate-income communities.

SBA Community Advantage and microloans disbursed in 2015: $6.6 million

[Back to the top]

Other notable nonprofits Kiva U.S.

Kiva U.S. is a part of Kiva, a nonprofit working in more than 80 countries. To receive an interest-free microloan through Kiva U.S., borrowers first must have friends and family members lend to the venture. This helps establish the borrower’s creditworthiness. Once that happens, Kiva opens the loan to its lenders for funding.

Pacific Community Ventures

Pacific Community Ventures is a San Francisco-based community development lender that offers loans of between $10,000 and $200,000 to small businesses in California. You need to have been in business at least a year and have at least two employees. However, if you have a solid business record and a firm grasp of your business finances, PCV may offer you a loan even if you fall short on some requirements.

Excelsior Growth Fund

Excelsior Growth Fund offers online loans of up to $100,000 for approved borrowers in less than five days and funding of up to $500,000 through its ImpactLoan program. The lender deals with borrowers who typically wouldn’t qualify for traditional financing because their company is a startup or has poor credit. Through affiliates, it also provides SBA 7(a) and Community Advantage loans.

Business Center for New Americans

Business Center for New Americans provides financing of between $500 and $50,000 to small businesses in New York City. Borrowers must be in the retail, light manufacturing, restaurant or service industry, and existing businesses must have at least three to six months of “verifiable revenue,” according to the organization. Brand-new companies must present a startup budget.

For other small-business financing, compare options on NerdWallet’s small-business loans tool page.

Compare business loans


Benjamin Pimentel is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @benpimentel. NerdWallet Staff Writer Kelsey Sheehy contributed to this story.

Updated Oct. 26, 2016.

Mortgage Rates Today, Wednesday, Oct. 26: Continuing to Climb; Purchase Originations to Increase

Thirty-year and 15-year fixed mortgage rates saw a considerable jump on Wednesday, while 5/1 ARM rates remained the same, according to a NerdWallet survey of mortgage rates published by national lenders this morning.

Mortgage Rates Today, Wednesday, Oct. 26 (Change from 10/25) 30-year fixed: 3.71% APR (+0.04) 15-year fixed: 3.13% APR (+0.04) 5/1 ARM: 3.61% APR (NC)  Purchase originations forecast up, refinance down

Echoing the predictions of other industry outlook reports, the Mortgage Bankers Association expects purchase mortgage originations to go up and refinance originations to go down in 2017.

“Strong household formation coupled with further job growth, rising wages and continuing home price appreciation will drive strong growth in purchase originations in the coming years,” Michael Fratantoni, MBA’s chief economist, said in a news release on Tuesday.

Assuming rates don’t drop in the wake of Brexit Part 2 or worse, Fratantoni said refinance activity will slow as a result of increasing rates and the fact that many homeowners had the opportunity to take advantage of historically low rates these past several months.

The MBA expects an 11 percent increase next year in purchase originations, totaling around $1.10 trillion. Refinance originations will fall by 40 percent compared to this year, totaling $529 billion. Forecasts for 2018 were published as well: $1.18 trillion for purchase and $410 billion for refinance.

“Rate increases through 2017 and 2018 will likely be gradual, as Chair [Janet] Yellen and the Fed have indicated that they are going to be cautious going forward,” said Fratantoni. “Historically low, and in some cases negative, rates around the world continue to put downward pressure on longer-term U.S. rates, keeping them lower than the domestic growth environment would otherwise warrant. We expect that the 10-Year Treasury rate will stay below 3% through the end of 2018, and 30-year mortgage rates will stay below 5% over the same period.”

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

Michael Burge is a staff writer at NerdWallet, a personal finance website. Email:

4 Student Loan Myths You Might Believe

Trying to find the right way to handle your student debt sometimes feels like trying to avoid talking about the presidential election. Everyone seems to have an opinion, so it’s easier to tune out and pretend it doesn’t exist. But your loans, like the election, won’t go away just because you want them to. So it’s important to know the details of your student debt.

We’ll help you get started by shedding light on four common student loan myths you might believe:

1. If you don’t work in public service, you can’t get student loan forgiveness

Public Service Loan Forgiveness isn’t the only way to get your federal loan debt wiped out. You can also get forgiveness if you sign up for one of the income-driven repayment plans, like Revised Pay As You Earn, which is available to all federal loan borrowers. For those plans, your monthly payment amount is tied to your income, and forgiveness applies to any debt you have left over at the end of your loan term. That’ll take 20 to 25 years, depending on which plan you sign up for.

If you qualify for both Public Service Loan Forgiveness, which forgives your debt after 10 years, and an income-driven repayment plan, you’ll save the most by opting for both. That’s because the income-driven plan will lower your monthly payment amount, so more debt can be forgiven after 10 years.

Use the Department of Education’s repayment estimator to see which income-driven plans you qualify for. You’ll have to reapply each year and, unless you go through the Public Service Loan Forgiveness program, you’ll have to pay income tax on any amount that’s forgiven.

2. Paying off your student loans should be your first priority

Not necessarily. Debt that carries a higher interest rate than your student loans, like credit card debt or a personal loan, will leech money from your bank account faster than your student loans will. It’s best to tackle that debt first. But getting out of debt is just one part of financial security. You’ll also need to save for long- and short-term goals.

“An emergency fund and taking advantage of employer [retirement] matching contributions should almost always take precedence over paying off student loans,” says David Metzger, a certified financial planner at Onyx Wealth Management.

Figure out what you owe and what your interest rates are by logging into your various financial accounts. Then take a look at your monthly income and examine your spending habits from the past month. That way you’ll know which debts to pay off first, and you’ll be able to make room in your budget for both rent and retirement savings.

3. If you have lots of student loans, consolidation is always a good idea

The truth is, it depends on when you took out your loans. Consolidation used to be a way to simplify your monthly payments, but recent grads usually have all of their federal loans with the same servicer, so it’s often no longer necessary.

Today, federal student loan consolidation is most useful in qualifying for Public Service Loan Forgiveness or income-driven repayment plans. That’s because Federal Family Education Loans, Stafford loans and PLUS loans need to be consolidated into a federal direct loan to qualify for those programs.

But if you have a Perkins loan and qualify for forgiveness, including it in consolidation would mean giving up forgiveness benefits for that loan. And if you have several different types of federal loans, it’s cheaper to exclude direct loans, since your new loan’s interest rate would be the average rate rounded up to the nearest 0.8%. Plus, your loan term will be extended if you owe more than $7,500, so you’ll end up paying even more over the life of your loan.

“If you are going to pursue an aggressive repayment of student loans, it would save you both time and money to repay the loans with the larger interest rates first, an option lost once you consolidate,” says Danna Jacobs, a certified financial planner at Legacy Care Wealth.

4. You’re stuck with the interest rates you got when you took out your loans

If you have student loans with interest rates over 6%, student loan refinancing could lower your interest rates and rein in long-term costs. It’s usually not a good idea to refinance federal loans through a private lender, though, since you’d have to give up federal borrower protections like income-driven repayment and forgiveness. To qualify for refinancing, you’ll need a steady source of income and a good credit score, typically 690 or higher.

Use NerdWallet’s student loan refinance calculator to see if it’s right for you.

Devon Delfino is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @devondelfino.

Study reveals 14 craziest excuses for calling in sick to work

While many employees use the old-fashioned "not feeling well" excuse to take off work, others have come up with the weirdest excuses in the book, according to a study from CareerBuilder

In its annual survey, CareerBuilder found that more than 35 percent of workers have called in sick when they were feeling fine, and 33 percent of those employers say they have checked to see if an employee was telling the truth.

Here are the 14 craziest excuses employers reported hearing from their workers:

>> Read more trending stories

1. The ozone in the air flattened my tires. 

2. My pressure cooker exploded and scared my sister, so I had to stay home. 

3. I had to attend the funeral of my wife’s cousin’s pet because I am an uncle and pallbearer. 

4. I was blocked in by police raiding my home. 

5. I had to testify against a drug dealer, and the dealer’s friend mugged me. 

6. My roots were showing, and I had to keep my hair appointment because I looked like a mess. 

7. I ate cat food instead of tuna and am deathly ill. 

8. I'm not sick, but my llama is. 

9. I used a hair remover under my arms and had chemical burns.

10. I am bowling the game of my life and can't make it to work. 

11. I am experiencing traumatic stress from a large spider found in my home. 

12. I have better things to do. 

13. I ate too much birthday cake. 

14. A duck bit me.

Read full study at

Texas jewelry store's 'shotgun wedding sale': Buy a ring, get a gun for free

A Texas jewelry store will hold its annual “Shotgun Wedding Sale” starting Thursday and ending Saturday.

Thacker Jewelry in Lubbock is offering a gift certificate for a shotgun or rifle at local gun store LSG Tactical Arms with each purchase of an engagement ring over $2,000.

>> See the store's Facebook post here

Thacker Jewelry Shotgun Wedding Sale is next Weekend. Free Shotgun or Rifle with purchase of engagement ring over...Posted by Thacker Jewelry on Wednesday, October 19, 2016

Owner Joe Thacker gave some insight on the promotional event, now in its third year:

"The idea, of course, is the wordplay and the old shotgun wedding. Not going back to the negative connotation, playing off of that and it’s been a lot of fun. We had a lot of people participate and this year we’ve even gotten into it more."

You can RSVP for the sale here. If you can’t make it to Texas in time, put this on your calendar for next year.

>> Read more trending stories

(H/T: CNN)

>> Watch a video about the sale

​Final SGWSTalk about getting a Bang for your Buck! Once you watch this Thacker Jewelry video you'll be talking about our famous Shotgun Wedding Sale this weekend! Scoot on in to Thacker Jewelry for this incredible sale! #thacker #shotgunweddingsale #lubbockPosted by Thacker Jewelry on Tuesday, October 25, 2016

3 Ways the Cost of Your Mortgage Can Go Up Before You Close

Getting a mortgage can be a costly endeavor from the onset. You’ve got to worry about getting together a down payment, securing an affordable interest rate and covering closing costs, among other things. What you may not realize is that the total costs of your mortgage can wind up rising before you close on the loan, especially if you don’t plan accordingly. Fees associated with a home loan can change for a slew of reasons, but here are the most common ones to look out for.

1. You Take Your Time Supplying Documentation

When your lenders asks for bank statements, pay stubs or any other form of supporting documentation for your mortgage application, it’s in your best interest to get this paperwork to them as quickly as possible. In fact, aim to do so within the following 24-to-48 hours. Failure to provide documentation in a timely fashion can result in having to take a rate-lock extension, which could drive up the total cost of your loan.

See, an interest-rate lock is only good for a certain period of time, typically for 30 days or, in some cases, as long as 45 days. Essentially, a rate lock locks in the rate you’re going to pay over the life of your mortgage for a certain period of time under certain terms. But, as the market moves, the value of this rate lock to the end investor can go up or down.

As an example, let’s say you lock in a 30-year fixed-rate mortgage at 3.625% with no points on $500,000 loan. As the rate-lock’s 30-day window expires, it is determined you’ll need another 10 days to close. Meanwhile, interest rates changed and are now at 3.875% on a 30-year fixed-rate mortgage on that same $500,000 loan. Since rates rose and your lock-in date has passed, it is now more financially advantageous for the end investor to lock in a new loan with a higher interest rate. Depending on the situation, the lender would either re-lock your loan at worst-case market pricing or would allow you to extend your loan, potentially driving your loan fees higher.

2. You’re Derailed By External Factors

External factors can also cause delays in escrow. These can include the seller of the property failing to quickly sign required documentation or home appraisal delays. These delays aren’t your fault, but can still cause you to have to pay more money when extending your interest rate lock. Best to plan accordingly. This means ordering an appraisal upfront when buying a home in order mitigate delays down the line. When refinancing, it’s a good idea to order the appraisal at loan application or to plan for a 45-day escrow timeframe.

3. The Appraisal Doesn’t Go as Planned

Residential real estate appraisers have total and complete authority on the value of your property. Most mortgage companies have a set standard appraisal fee. However, the appraiser has the right to change what they want to charge for the appraisal. For example, if the appraiser has a heavy workload, they may require more money to complete the order. They also may deny the order, resulting in the lender having to find a new appraiser. If you’re on a tight closing deadline, you may have to pay the additional fee to have the appraisal done quickly or within the timeframe stated in your purchase contract.

If your appraisal does not come in at the desired value, changing the loan-to-value ratio on your mortgage, you may also subsequently face higher fees and/or rates than you were expecting based on the prior valuation of the home. Additionally, if the property is missing a carbon dioxide detector, which in some states is required by law, the appraiser must to go back out to the property to sign off on the appraisal following installation, resulting in an additional charge.

The best way to mitigate additional fees is to stay in constant communication with your lender. You can also generally lower the cost of your mortgage by improving your credit, since a good credit score will help you qualify for the best interest rates. You can see where your credit stands by viewing two of your credit scores, updated every 14 days, for free on

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