Archive for December, 2010


Holiday Love From BankAim

I hope your Holiday’s have been as great as ours at BankAim.

We have had an insane holiday season.  Our main two writers have been traveling like maniacs and unfortunately we haven’t been able to spend as much time online with you as we would like.

We have some incredible things planned for 2011 so stay tuned.

Thank you for making November and December BankAim’s most popular and successful months online, and we only plan on growing in 2011.

So have a great New Year and we’ll see you next year.


US Bank Mortgage Rates and Review

US BankUS Bank is one of the nations largest and most popular banks.

US Bank headquarters is located in Cincinnati Ohio.  They have $266 billion in assets and operate in over 50% of the states.

What do the people think of US Bank?

According to MyBankTracker, US bank has 2 of 5 stars based on 34 ratings.  The ratings range from “Consistently Good Service” to “Next to impossible to get anything from this bank”.

According to Viewpoints.com, US bank has 1.6 out of 5 rating based on 36 ratings.  Now keep in mind people are far more inclined to rant online when they have been wronged, you may have a different experience.  I always take the low ratings as average and if there is high ratings that makes that company all the better.

US Bank Mortgage Rates

  • 30 year fixed rate – 4.75% with 1 point and an APR of 4.903%
  • 15 year fixed rate – 4.125% with 1 point and an APR of 4.385%
  • 5/1 ARM – 3.125% with 1 point and an APR of 3.508%

These rates are above the national average for mortgage rates, which as of the day this article was posted is:

  • 30yr fixed  –  4.46%
  • 15 yr fixed  –  3.81%
  • 5/1 ARM  –  3.49%

You can jump over and check out the current mortgage rates.


Unusable Money – Flaw in the New $100 Dollar Bill

Lets burn 1 billion $100 dollar bills.

Sounds crazy right?  That is exactly what the US government is planning on doing with over 1 billion 100 dollar bills that were printed with a flaw.

As of now the enormous amount of useless cash is stored up in a vault in Texas.

So what went wrong?

Turns out the printing presses could not handle the sophistication of the new bills.  The new bills which were 10 years in the making had 3d imagery, a color shifting image of a bell and plenty more goodies to fool counterfeits.

Some of the bills creased during production causing a blank section on the bill.  Another issue is that there are bills that are printed correctly mixed in with the defunct bills.  Sorting these bills by hand would take an estimated 30 years!  A machine will be created to automatically sort the good and bad bills.  This will take a year.

So what does a “minor” mistake like this cost us tax payers?  120 million is what it cost to develop the bills, plus we can take on the machine and time it takes to sort the bills.

The quarantined bills, totaling $110 billion, add up to 10% of the US cash supply, which is $930 billion.  Production has begun on the old 100 dollar bills so there will be a reduced shortfall.

I guess Ben didn’t like his face lift.


Melrose Back On Top Of 2 Year CD Rate

That was fast! It only took a few days and no work on Melrose Credit Union’s part, but they are now back on top of the 2 year CD rate. Bank of Internet lowered their 24 month CD rate to 1.60%, causing Melrose to take the lead once again.

It seems like a bank would want to hold on to the top spot of any CD rate terms, even if it was just for a week, but it only took a matter of a few days before Bank of Internet decided to lower their rates.

The next best 24 month CD rate goes to Stonebridge Bank which is rated 1 out of 5 stars from Bankrate, which means ‘Lowest Rated’. That does not necessarily mean the bank is failing, but can give a good indication on how well the bank is performing. As long as the bank is FDIC insured, your money will be safe up to $250,000.

Here are the most up to date 24 month CD rates after Melrose:

These banks offer no restrictions on who can open an account and invest into their certificate of deposits. Melrose Credit Union has no restrictions on who can apply for their credit union and only charges a $1 fee.

Be sure to check our CD Rates page for the most up to date information.


Mortgage Rates Continue To Rise But For How Long?

For the 3rd week in a row mortgage rates increased.

As the economy shows signs of growth the bond yields become less attractive to investors and as the bond yields have risen the mortgage rates have followed.

Just last week mortgage rates hit a 3 month high and the mortgage rates continued on the upward trend.

December 2, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.46 % 3.81 % 3.49 % 3.25 %
Fees & Points 0.8 0.7 0.6 0.6

Last week rates were as follows:

  • 30 Year – 4.4%
  • 15 year – 3.77%
  • 5/1 – 3.45%

Does this mean Mortgage Rates will continue to move up?

As long as these trends continue the rates will continue to rise.  As the economy gets stronger there is no where for the rates to go but up.

Experts have been predicting the floor of the mortgage rates for quite some time and we could have finally seen it pass.

Check back often as we update the rates and mortgage information.


Clearing Debt the Sensible Way

The economic crisis by now has impacted everyone and the majority of people have way too much debt. While it will take some time to clear all this debt, there are ways to reduce what the debt is costing you.

If you are really interested to clear debt as soon as possible then you may just want to follow these tips to reduce the costs. You may be on your way to that perfect credit score rating sooner than you think.

First you must assess all of your debt to see which is costing you the most. It would seem obvious that the debts incurring the highest rate of interest are the ones you should try to reduce the fastest. Often this is credit card debt, which is usually closely followed by debt on that new flat screen TV or nice lounge suite. Analyze your credit card bill and your other loans.  Ascertain which one is costing the most in monthly interest and work at trying to pay that off quicker.

If you are not in a position to make additional payments on any debts, there are ways to still reduce what you owe. Instead of a lot of small debts you should look to consolidate them into one debt. It may seem obvious, but in their desperation to clear their debt, many people look past the obvious; ensure that the cost of the consolidated debt is not more than the total of all the small individual ones. If it is then consolidate only the ones at a higher rate into the debt consolidation loan and leave the others.

Although it is nice to think of the lower payment each month, this should not be the only factor to consider. Take into account the remaining period on your individual debts. Even if a debt is at a higher interest rate, it makes little sense to reduce the interest by 2% into a 36 month consolidated loan when there is only 6 months left on it right now. Rather leave that out of the debt consolidation and use the money saved on the other debts to try settling that one even quicker.

Remember that there is a cost involved in consolidating your debt – there are fees involved in the new loan and there are often penalty fees for settling existing loans early without giving 90 days notice. Take this into  account when calculating any potential savings. The cost of the debt is not only in the payment, although that will be the major factor in terms of affordability – a loan at 12% over 12 months will cost you more in interest than a similar loan at 10% over 36 months, for example. Always look at the total interest you are paying, not just the nominal rate.


Best 5 Year CD Rate Finally Drops Below 3%

When you thought the financial news couldn’t get any worse, Melrose Credit Union lowers their 5 Year CD to 2.93% APY on Tuesday. Mortgage rates are increasing and saving rates are decreasing, it seems to be the same old news week after week. Melrose Credit Union was our glimmer of hope, our bright shining star in this dark and dreary economy.

This small credit union from Queens, N.Y still leads in the 5-year ranking, but has dropped below the 3% barrier. They are still paying a quarter-point more than any other financial institution and also still lead in other CD terms.

One of the reasons why rates are tumbling is because the Fed continues to give banks as much cash as they want for near nothing. The Fed also announced in early November that they planned on buying $600 Billion worth of Treasury Bonds, this move has helped keep rates depressed.

Here is a list of the next best 60-month CD rates:

Anyone nationwide can qualify and open an account with these banks and financial institutions. Melrose Credit Union also allows anyone to join their credit union for a $1 fee and a $25 deposit into a savings account.

Compare these rates with our updated CD rates board to be sure you get the best rates available nationally.


Bank Of Internet Tops 2 Year CD Rates

Who would have ever thought that another bank could overtake Melrose Credit Union on any of the long term CDs. Melrose cut their rates across the board on Tuesday, causing a small ripple effect on the top CD rates charts. As soon as Melrose dropped their rate to 1.66% APY, Bank of Internet assumed the lead at 1.72% APY.

Bank of Internet is based out of San Diego, CA and is paying 1.72% APY on deposits over $1,000. This is a rate they have offered since the beginning of November.

To put things into perspective, this rate is three-quarters of a point less than what was offered for the 2 year certificate of deposit last December 2009.

Here is a list of the best available 2 Year CD rates:

  • Melrose Credit Union from Queens, New York at 1.66% APY with a minimum deposit of $5,000.
  • Stonebridge Bank out of Philadelphia at a rate of 1.65% APY with a minimum deposit of $500.
  • Discover Bank, owned by the major credit card company at a rate of 1.60% APY with a minimum deposit of $2,500.
  • Colorado Federal Savings Bank from Colorado at a rate of 1.60% APY with a minimum deposit of $5,000.

We have posted these banks and credit unions because they allow anyone nationwide to open and invest in their CDs, either online, at the local branch or through the mail.

There are no requirements that would keep the average person from opening an account with these financial institutions. Unlike other credit unions, Melrose has no restrictions on who can open an account with the union. There is a $1 fee and the requirement of having a savings account funded with $25.

Be sure to compare these rates with the most up to date CD rates from our database of banks.


What is Yield Spread Premium (YSP) on a Mortgage?

Yield Spread Premium (YSP) is a factor of the loan which will affect either the rate you receive or the money going into the loan officers pocket.  There are many misconceptions about what YSP really is.  Many people think that YSP is a way for brokers or loan officers to simply make more money, and a ton of people have no idea what YSP is altogether.

When I was a loan officer I would always try to educate and inform borrowers about YSP and what it is.  I was surprised to find so many people really knew nothing about it.

Even though Yield Spread Premium is way loan officers can make money on a loan it is a much more powerful tool, that if you understand it can work in your, the borrowers, favor.  First of all let me clarify that YSP is completely legal as long as it is properly disclosed in your loan documents. Some loan officers will attempt to skim over the documents concerning YSP.  If a borrower does not understand YSP it can be difficult to explain it on the spot and this may be the reason they skim over it, or they are trying to make more money with the YSP and do not want you asking questions.  A good loan officer will explain the YSP and show you options with your loan.

YSP basically affects the interest rate of your mortgage. When shopping for a rate for you a loan officer will see something like this from the lender or bank.

RateYSP
4.5%0% (par rate)
5%.5%
5.5%1%
6%1.5%

The YSP percentage is what the bank will pay the loan officer if they sell the loan at that interest rate. So in this case say you sign a lock in agreement for 5.5%. The bank which is funding the loan will pay the loan offer/mortgage broker 1%. So on a $150,000 that equals $1,500.

How you can take advantage of YSP: Now that you know what YSP is you will need to know how to use it to the best of your advantage. Do not say to your loan officer “I know what YSP is and I don’t want to pay it.” YSP is very normal on a loan and using it to work for you is what you need to do. A good loan officer deserves 2% – 2.5% on the loan whether that is up front or on the back. “Discount” loan officers will usually cause you more headaches because of errors and a slow process.

Using the numbers above if you decide to take the 4.5% interest rate with 0% YSP that 1 % will be moved to the front of the loan.  Therefor your origination fee will be 2% instead of 1%.  Essentially you are paying up front to lower your interest rate to the lowest rate possible.  Many times this makes a lot of sense to do because you will save money in the long run by paying lower monthly payments with the lower rate.

You can determine how many months it will take to repay the 1% by doing a simple calculation.  Lets use these figures.

  • $150,000 Loan Amount
  • 5.5% with 1% YSP
  • 4.5% with 0% YSP

Hypothetically the payment on the $150,000 at 5% equals $700.  The payment on the 4.5% equals $600, but remember it cost you $1,500 up front by paying for that 1% on the front of the loan.  The difference between the payments is $100 which means it will take you 15 months to pay the difference of the $1,500.  If you stay in your house longer than 15 months then every month you are saving/earning $100.

Difference between YSP and Buying down points: This concept works the exact same when you want to buy your rate down with extra points.  The simple difference is that YSP is usually apart of a normal loan and you can learn to take advantage of points and dollar amounts that are already apart of the loan.  Buying down points usually means that you will pay an extra percent of the loan to get a rate under the Par Rate (Par rate is the Rate in which there is 0% YSP).


Best CD Rates For December 1, 2010 (Updated)

We have to post an update to the best CD rates leaderboard because of some major changes. Melrose Credit Union decided to lower their rates yesterday by about a tenth of a point across the board and since they owned the top spots for four major CD terms, we decided to post a mid-week update.

Now that Melrose lowered their rates, this has caused some major shake ups to our leaderboard, with other banks and financial institutions closely behind or over taking Melrose on some CD terms.

The New York based credit union still sits at the top of the 36-month and 60-month CD rates and ties for the lead of the 12-month term.

Sanibel Captiva Community Bank out of Florida and Bank of Internet from San Diego California still hold onto their spots of the 3-month and 6-month CDs.

Here is the updated rate table for the best CD rates in the nation:

*TermBankDecember 1November 29
3 Month CDSanibel Captiva0.95% APY0.95% APY
6 Month CDBank of Internet1.15% APY1.15% APY
12 Month CDMelrose Credit Union
Bank of Internet
1.41% APY1.51% APY
24 Month CDBank of Internet1.72% APY1.76% APY
36 Month CDMelrose Credit Union2.17% APY2.27% APY
60 Month CDMelrose Credit Union2.93% APY3.03% APY

All of these financial institutions allow anyone nationwide the ability to open and invest into their certificates of deposit, either through the mail or online. Most credit unions have strict requirements that drastically reduce who can qualify for their CD products, but Melrose is an open-ended Credit Union, allowing anyone, anywhere to register for a $1 fee.

Be sure to check out the most up to date CD rates from our CD rate boards. These rates can be out dated and as with any certificate of deposit, these rates can change at any time.