Two Cents: August Mortgage | Example | 401(k) Loan



Does Refinancing Cost Money?

Yes—but not as much as you might think. Typical costs range from $2,000–$3,500, depending on your state and loan type.
Tip: If you qualify for an appraisal waiver and TRAC Lite, costs can drop to around $2,000.
Good news: Most of the time, you don’t need to pay upfront—costs can be rolled into your loan or covered by lender credits.
πŸ‘‰ Want to see how much refinancing could save you—or if you can shorten your loan term?  Read our Refinancing FAQ Blog:   Refinancing FAQ


Example: The 1% Down Payment Program

This program offers up to $7,000 in lender credits for closing costs—making homeownership more affordable. We’ll walk you through an example to help you better understand how this program works and decide whether it’s right for you.

1% Down Payment Program: A Low-Barrier Path to Homeownership

Eligibility requirements:

  • Must be a first-time homebuyer (No primary residence ownership in the past 3 years)

  • Household income must not exceed 80% of the area median income

  • Home price has to be $350,000 or less


Use Your 401(k) Loan for Your Down Payment

The down payment is often the biggest challenge in buying a home. If you have a 401(k) retirement account, a loan from it can make the process much easier:

  • No Impact on DTI: A 401(k) loan isn’t counted as debt, which helps with mortgage approval.

  • Counts as Your Own Funds: These funds belong to you and can be used for the down payment.

  • No Taxes or Penalties: Unlike early withdrawals, loans avoid taxes and penalties.

  • Not Treated as a Traditional Loan: Simplifies the approval process and doesn’t increase your reported debt.

Tips: A 401(k) loan can help you buy a home faster, but use it wisely. Always consider your long-term financial plan to ensure your retirement savings stay on track.


August Mortgage Market Update

In early August, 30-year fixed rates dropped to a monthly low, driven by weaker-than-expected job data and tariff news. Although inflation data caused a slight rebound later in the month, rates are still hovering near their lowest levels of 2025.
πŸ‘‰ Our 90 bps refinance credit special ends on September 16.
Recently, Fed Chair Powell signaled a cautious—but open—stance on a potential September rate cut.
Worth noting: After the Fed cut rates by 50 bps last September, mortgage rates actually climbed higher afterward.
Will history repeat itself this year? Let’s wait and see.



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