Refinancing?
9I’m a little clueless about homeownership.
I bought my house just over a year ago. Since then my credit has gotten better and apparently interest rates are at a two year low. I have an offer that will save me 1.126% and roughly $200 a month.
How do I know if this is a good deal? Anything I need to look out for?
What’s a good closing cost?
Is there a professional I should be talking to about this?
- 15 comments, 35 replies
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Nobody is going to look out for you like yourself. I’ve got some local contacts due to the nature of what I do but basically it’s time to get educated and not in a hurry. They can make sewer rat sound like mutherfucking pumpkin pie sometimes.
I’m a big fan of consumerist Clark Howard. There’s some articles on his web site, such as this: https://clark.com/homes-real-estate/should-i-refinance-mortgage-now/ but poke around there, there’s more.
Here’s another article I found that looks pretty good too: https://www.nerdwallet.com/blog/mortgages/how-to-refinance-your-mortgage/
@therealjrn the calculators are good, though I tend to like the nerdwallet one best. They all calculate months to breakeven (under 2.5 - 3 years is good) and the total saved over time. There are a bunch of useful calculators on my bank’s website organized by questions they answer, which I really appreciate.
https://www.esl.org/resources-tools/calculators
@therealjrn @ybmuG We re-financed in 2017 with Tonowanda Valley FCU- they had the lowest interest rate, finance charge, and allowed us to separate homeowners insurance and local taxes [school and town/county] from our mortgage, so that we no longer had to include money for an escrow acct in our monthly mortgage payments.
On the other hand, ESL is the only FCU we have ever actually received membership dividends from,so we primarily utilize them for our banking.
@PhysAssist @therealjrn @ybmuG Why did you care about getting rid of your escrow account? It lowers your monthly payment, but you just replace it with annual lump sum payments you have to deal with separately.
@Limewater @therealjrn @ybmuG I keep my money in my higher interest bearing account[s] until time to pay comes around annually.
Also, made it a lot easier to change homeowner’s insurance company.
Prior to this, we had a lot of problems with the mortgage company [Countrywide] playing games with our escrow payments so that our ,monthly payments got jacked up [after a projected short-fall], then sending us a check at year end when they had made us pay more than necessary, and the interest they paid sucked too.
BTW, you may recognize the name of our erstwhile mortgage holder as one of the big players in the real estate bubble bursting- they were well known for lending very aggressively to people with less than stellar credit, for properties that were marginally worth the loans.
As SWMBO and I had both been thru divorces in the 2-3 years before we starting trying to become homeowners, and I had just begun working as a PA, it was a good thing for us, because we couldn’t have gotten a loan otherwise, and there was no way that we were going to default on our loan- but a lot of others borrowed so much they could never stay afloat and did default.
@PhysAssist @therealjrn @ybmuG
I generally like to do the same, but I’m not sure it’s that big a deal in this case.
For a sub-one-year time horizon with monthly investments, you’re pretty much stuck in money market accounts.
Say your annual property taxes and insurance comes to $6,000. If your escrow account pays 0.00% interest AND you maximize your maximize your returns by getting into the best possible money market account right now at about 2%, and you stay on top of it and make sure you’re transferring money into that money market account every month, you’re looking at about $65 in interest income (that you have to pay taxes on) over the course of the year. And that’s if you stay on top of it and do everything right and have a bad escrow account and have relatively high property taxes.
I’m all for saving small amounts. Honestly, I agonize way too much and spend way too much time saving relatively small amounts of money. I still found having an escrow account to be a nice convenience, even though I was not required to have one.
@Limewater @PhysAssist @therealjrn back in the olden days when you could get a 6-month CD @7-8%, not doing escro was definitely the way to go if you could. Now, not such an advantage.
@ybmuG While our current money market fund rate doesn’t quite compare with the CD interest rates you quoted, it’s still tons better than the rate we were getting on our escrow account.
@Limewater As I noted below, it’s true that it’s not a great difference in interest, but it is better than nothing, and it’s even better to have the $$ available for a buffer in case of emergency, rather than trapped in an escrow account and out of reach.
Read read read / I would start there.
Lots if good stuff on this on the Evil Internet.
Overall this re-fi looks like it might be excellent for you
(Disclaimer:
This Advice is offered with zero knowledge of the facts. This Advice is worth far less than you paid for it.)
@f00l The problem with trying to research mortgages and refi online is the noise. An overwhelming amount of paid placements proliferate search results, and a ton of marketing information is disguised as legitz learning information. It’s maddening.
@RiotDemon, I feel ya. I just went though this same topic while figuring out how to manage the cost of moving my mother across the country and getting her set up here. It was a bit different in that I don’t have a mortgage to start with so it technically isn’t a refi, but a home equity loan (higher rates and fees, FML).
My only advice is to scrutinize every detail of fees, APR and interest rate. Origination fees, points, application fees, appraisal, title and escrow fees… when I looked into this about 4 months ago total costs were running around 1.7% of the principal.
@RiotDemon @ruouttaurmind
I would start with reputable financial advice and info sites.
I don’t have a list of them on the to of my head, but will try to think of some.
Bogleheads, thinkorswim, and the FICO forums come to mind. Tho I haven’t looked at these in a long time.
These cover financial issues. I presume including mortgages.
Dave Ramsey’s site and the forums at the “you need a budget” site might have good stuff.
I presume there is some good stuff on Reddit. Noise/value ratio there:. I dunno.
@f00l
Ramsey has sold out. His information is solely focused on getting you to visit one of his in-network “professionals”, as is the case for nearly every topic he covers. Disappointing. He used to be above that wholesale marketing crap.
@f00l @ruouttaurmind
for YNAB. Biggest takeaway us that you plan where you will spend your money, not figure out where it went. No surprises, don’t carry balances, best daily personal finance tool I’ve found. The forums are helpful too. I’m still doing fine with the OG non-cloud version.
@f00l @mike808 @ruouttaurmind I feel constantly stifled by YNAB’s lack of any planning, projecting of the future, or handling of timing-related issues – the budgeting part of budgeting. It’s great for tracking spending though, which is what I use it for.
I am on the cloud version, grandfathered in at the old $50/year price or whatever it was. The new… what, $84?, seems a bit steep to me. Then again, it is over the course of a year, so, ehhh.
There is a personal finance stackexchange site that I have seen good advice on, too: https://money.stackexchange.com/
@InnocuousFarmer @mike808 @ruouttaurmind
The lack of future planning/projecting within YNAB bothers me also.
Have you found good sw solution, other than a spreadsheet or similar?
@f00l I haven’t… been meaning to look at GNUCash, an actual double-entry accounting system. Mainly I use either spreadsheets or Python code.
@InnocuousFarmer
Is the code sharable? Is it something someone else could make use of without modification?
Or too “fixed up for you” for that?
I really want a good “budgeting/forecasting/planning” app/SW/service.
@f00l I have been using it as an excuse to screw around with a Jupyter notebook. I would be happy to share it once I get it reasonably usable.
I don’t know if it’d be what you’re looking for though, and the quality of the code is probably uh… well, it’ll run, eventually. (Maybe in a week or something.) I have this idea of structuring the budget based on intervals corresponding to income, and then some description of, for the interval, slices/envelopes/whatever going to current and future expenses, by category. The whole thing could balance to zero for whatever period, maybe a year or two, with “savings” or “surplus” being, probably, a category treated similarly to expenses.
Figured I could then compare that to a history of what I actually spent, from a YNAB export. I might make assumptions, like assuming you’re not tracking accumulated savings in YNAB. (I’ve somewhat screwed up my YNAB data at the moment by being ambiguous, in the abstract, about what exactly “saving” is.)
Had some old code, not sure where, just to make sure totals in and out would balance over the course of a year.
@InnocuousFarmer
It’s likely too much for me to mess with, unless you get it into user friendly shape. And I don’t expect you to do that for my benefit.
And I’m completely short of time right now.
I’m just going with spreadsheets for now.
I’d be happy to head any tour progress tho. Sounds like a great idea. I wish there was a developed package for this somewhere.
@f00l @InnocuousFarmer Not sure what you’re talking about YNAB not doing projected it budgets well. I see future months budgets just fine (unless that’s gone in the cloud version.
I do budgeting mostly through recurring expenses. I do quarterly stuff as 4 separate annual events if they vary (like summer/winter bills).
That and carry forward budgets. So maybe you’re doing it wrong?
Before YNAB, I used Moneydance which is a double-entry system written in Java and has a plugin API. It can do OFX, but that’s fallen out of favor along with the security risks since banks don’t use separate logins and its not as sexy as “API” interfacing.
https://infinitekind.com/moneydance
@f00l @mike808 I suspect we’re using two different products. When companies move to web apps, the result tends to lose features relative to the older desktop app, or get redesigned. Not sure your version automatically imports transactions from credit cards and checking accounts, either… so you may be using it very differently when expenses don’t just show up automatically, on your phone even.
Here’s how I see it:
I’m salaried. I know how much money, for planning purposes anyways, I’m going to make this year. I know when the checks are going to arrive. I want to define my schedule of expenses such that I can hit savings targets by some date in the future, so that I can save a certain total amount (eventually retiring), and I also want to see how much a given weekly or monthly expense adds up to over longer durations. YNAB doesn’t really help with that kind of thing, planning out a year in advance.
It also makes you work strictly in month intervals, which means that my budget is always “in the red” at the beginning of the month, because I’m not going to plan only half the month’s income at a time (I’m paid every two weeks). I’m always going to have all the cash necessary to cover both the expenses and savings-type category subtotals by the time the expenses occur, but YNAB doesn’t support explicitly representing that idea.
Overall, if I don’t use tools outside YNAB, I tend to feel that it’s pushing me to just freeform “budget” expenses as I spend them, since nowhere is relative cost over a longer duration represented, and all the timing issues make everything murky – spending an extra $50 on comic books doesn’t mean my budget for the year is over budget, it just means the fuzzy month-to-month timing issues remain fuzzy.
@mike808 Probably need to say this explicitly too: YNAB-cloud is heavily cash-oriented. Repeating income/expenses aren’t represented in the budgeting view until current date == next expense date, and in the transactions view, you only see a grayed out version in italics for the next occurrence. It’s a heavy deemphasis on the future, to keep it simple, I think.
You can reconcile your accounts, which is a consequence of the cash focus that I find really useful.
There are “goals” you can set on budget categories, of the form $x total by y date, or $x/month, but those are too dumb to be useful.
If you budget a month in advance, the program doesn’t look at recurring income or expense transactions, only cash on hand vs. budget totals, so future months are “over-budgeted” 100% of the time, if you bother typing anything in.
@InnocuousFarmer @mike808
I don’t use YNAB (yet). I only know out due my friend enthusiasm.
Can you expand on the “too dumb” limitations?
@f00l I only meant the goals feature. Budgets are defined in lump sum categories by month. “Goals” are metadata you can set on a category indicating how much you would like to save or spend, or a balance you’d like to accumulate by a certain month – by “dumb”, I just meant “simple and limited”. I don’t have any use for them personally, but I could imagine them having a straightforward utility for other people.
I’d encourage you to give it a shot if you’re interested. There’s never a substitute for first-hand experience. I think it’s a useful tool, and they’ve got a month trial or somesuch.
@InnocuousFarmer
YNAB is on the “to do list”. Along with it seems like 10k other immediate imperatives.
@f00l @InnocuousFarmer That’s disappointing to hear that the cloud version is heavily focused to the mobile here-and-now transaction tracking. I get it because that’s where you want to capture the activity before you forget and make it a quick and convenient process, but that’s not how people do budgets and thoughtful planning for the future, which is the namesake of the product/service. That’s a spending tracker, which is useful, but not conducive to budgeting and there are a million spending tracker apps out there to compete with.
I guess I’m fortunate that I got my copy through Steam and so can download/re-install it whenever I upgrade my PC. I think they pulled down the download links to really force everyone onto the cloud-app-service model. I tried to give it a go, but I’d have to agree your experience with the mobile/cloud version isn’t as useful for … budgeting that the standalone program is. IMHO, the program version sucks at reporting, but it does have trend and pie charts to give you some good understanding, particularly now that I’m getting ready to setup my FSA amount for next year and year-end tax planning.
At the terms you quote, it seems a no-brainer. If you are talking about essentially the same term (I’m assuming you did a 30 yr which now has 29 left and you are now considering a 30 yr refi), then you are probably at about $200k. The $2400 savings in the first year should make this a great deal for you. Closing costs will be title, appraisal, legal, all should be less than that (though they will vary by where you live), unless you are paying points to get the rate. At that amount, 1 point is $2k. The deal starts to break down the more you have to pay up front. It just means it takes longer for the new loan to pay off. But, you should be able to get a reasonable estimate of closing costs from the bank. Sometimes, they have calculators on their websites that allow you to calculate how long it takes for a new loan to pay off.
The one wildcard is prepaid interest. If you close at the beginning of the month, you won’t have a mortgage payment for almost 2 months, but you’ll pay nearly a full month’s worth of interest before you begin repayment. That’s just additional overall cost. If you close toward the end of the month, you’ll have a payment sooner, but your prepaids should be a lot less, meaning the total interest paid is less. For reference, a month’s interest on $200k at 5% is over $800.
Another thing to consider is if you can afford the current payment, is there a shorter term with about that same payment, say a 20 yr? Rate should be less as well. You’d be amazed at how much that will take off your total liability. Say your total payment is $1000. And say you now have 29 years left and you refi to a 20 year with roughly the same payment. That’s 9x12x$1000=$108,000 in savings. Again, a loan rep at your bank should be able to make that calculation for you.
For any options, ask them if they can give you a TIL (truth in lending). It is supposed to give you an apples-to-apples comparison.
Good luck. It’s a great thing to be able to refi - especially when you have worked to make your own situation better!
…and regardless of everything else, if you can afford to send the $200/month you’ll be saving in as payments identified as to be applied directly on your principle, you’ll save tons more money.
A few random thoughts, in no particular order…
1- As mentioned, how long do you plan to stay at this home? ANY chance you’ll move in less than 5 years? i.e. is this a starter home/small home/condo and you expect kids in the near future, etc. Are you in a profession that is not necessarily abundant where you live? If so, don’t bother, odds won’t be in your favor.
2- How much money down did you give when you purchased? Has your house appreciated considerably? If your LTV was right at 80% when you purchased and the property hasn’t appreciated much, you’ll likely incur mortgage insurance which will eat up (typically, for at least a few years) the savings that the lower rate will get you.
3- Did you buy with any type of first time homebuyers incentive? If so, read your documentation because many of them prohibit refinancing within a certain time frame.
3- Who gave you this offer? Your current lender or is this just something you got in the mail? If it’s from your current lender, inquire about a streamline/portfolio refinance often offered to existing customers. They have reduced paperwork and closing costs, but it might also be too soon for that. Ask. If it’s something you got in the mail… I wouldn’t put much stock in it. Even understanding every jot of the fine print, your actual offer can be waaay off. To make matters worse, when you call in, the odds of getting a newbie loan officer/broker are very high. These jobs are often 100% commission and the turnover is atrocious. It leads, on one extreme, to honest folks making mistakes or offering you a deal that’s not the very best for you, or on the other end, desperate/nasty scammers outright lying throughout the initial and mid-process then pulling shenanigans at the closing table.
4- As to what are good closing costs, as a general rule, the closer the APR is to the offered interest rate, the better the deal. There a dozen places where banks can make money off of you in a refi without it looking like closing costs. If you like the rate (without paying points) and the APR is close to it, then you’re on good ground. Both of these will be on your TIL (truth-in-lending statement)… careful though, shadier places change the terms of the TIL throughout the process. Ultimately, the one in your closing package is the only one that really matters.
5- Typically, you have to go all the way down to 15 or 10 year terms to get a significantly lower rate than a 30 year. At some banks 20 might be better, but not by much. Be 110% sure that your comfortable with the increased payment (especially as a new homeowner) before committing to a shorter term. Nothing stops you from paying extra each month to pay off a 30/25 year mortgage off sooner (unless you have a prepayment penalty, yuck) but you can’t do the opposite and decide to send less if you hit hard times and you’d like to take 30 years to pay off the 15-year loan. The lower rate of the shorter terms is enticing, but it’s a bit of a gamble if your finances are tight. BTW, there’s no rule that says terms have to be round numbers. If you’re a year in to your current loan, you absolutely can refi to 348 months, 345 whatever. You won’t get a better rate than 360, but you won’t lose that year either if it matters to you psychologically.
6- In short. Yes, talk to a pro. I’d suggest you go through an organization that curates the lenders they recommend. For example, Dave Ramsey (the financial adviser) used to promote Churchill Mortgage, and if you called in through the phone number they used, you’d get brokers that catered specifically to financially savvy customers, and they wouldn’t play games. Another neat option I stumbled across was Costco. They have a bunch of lenders that have to meet certain criteria and they cap what they can charge you in fees. That’s probably the route I’d take if I were in your shoes to try and get an honest answer as to whether refi-ing is worth it or not in your situation.
7- Not related to refinancing, but put money aside (a few thousand at least) for repairs. Homes (especially older ones) are absurdly nasty when it comes to surprises. AC, plumbing, appliances, landscaping, roof… It’s best to have the money gaining interest and not need it, otherwise you’ll find yourself putting major unexpected stuff on credit cards and bam, you’re in the “American dream” hamster wheel. Doesn’t have to be that way, just strive to live well within your means and plan for stuff to break, because they will.
HTH!
I used to be a mortgage broker, AMA.
@jester747
Great stuff.
Any change you are familiar with FL? That’s the house loc for the OP.
@f00l Yup, I’m in FL. Seen some nice gains the last couple years, dunno if enough for a refi one year after purchase though. Depends on OPs specifics.
I got out of mortgage about 12 years ago, a couple of years before the bubble burst. I knew the gig was up when I’d have a solid married couple call me… say a cop married to a school teacher and house prices were so ridiculous they couldn’t qualify for a 30-year fixed on a 50 year old home. Lender reps kept pushing us to “solve” these scenarios by offering Option-ARMs (a verrry niche product for house flippers) with the promise/hope they could refi in a couple years when their house doubled in price… which of cooourse would keep happening forever /s.
Thankfully, I refused to do a single Option ARM ever. Everyone and their brother in the industry kept advertising them making my deals sound horrible… “You crook! Offering me a 5% when Mr. Honest can get me a 1.5%!” No amount of explaining works when with me you could only afford a beat up fixer-upper and Mr. Honest can get you in a McMansion. Nevermind that they’d be foreclosing in 18 months, but hey. Saw the writing on the wall and closed shop. Found an entirely different industry to work in and absolutely love what I do now. Not gonna lie, being a straight-shooter in the mortgage industry did get me a ton of business before things got to where sensical loans just wouldn’t work anymore. Hours were ridiculous though (60-70 hrs week!), don’t miss that one bit. Making a chunk less now, but muuuch happier.
A rate drop that big worth spending some mental energy on. The most important factor is how long you expect to stay in the house. If you think you’ll move in two years, it’s probably not worth refinancing. If you think you’ll likely stay for thirty years, go for it.
You should calculate your break-even point. You’re going to have to pay some closing costs and possibly other fees to refinance, and you’ll save about $200 per month, but you’ll also probably be adding another year of mortgage payments to your loan.
Take your total refinancing costs and add one years-worth of your projected new mortgage payment. Take that total number (in dollars) and divide by your monthly payment savings. That is your break-even point, in months. If you think you’ll try to sell the house before then, definitely don’t do it. If you expect to sell the house soon after, it’s a tougher decision, depending on how much hassle it is.
The above assumes you are talking about refinancing from a 30-year fixed into another 30-year fixed mortgage. Don’t go to an Adjustable-Rate Mortgage. There are cases where those are better, but yours is probably not one of them.
One thing you might want to ask about is refinancing to a shorter term. You can get an even lower rate, your monthly payments won’t necessarily drop at all, but more of your payment each month will go to principal and you’ll pay off the house earlier and then have no mortgage, which is very nice.
@RiotDemon
See this
https://apple.news/A3vgoLT11TpCAkc5IROTedA
Or
https://www.wsj.com/articles/loan-modifications-for-the-bestnot-distressedborrowers-11569490202
WSJ story
Some people who call their (quality) current lenders about re-fi options are getting offered lower interest rates for the full term of the loan, without going thru a re-fi.
I suppose this means the lender doesn’t want to worry about the borrower shopping around and perhaps doing a re-fi elsewhere. They keep the customer.
Perhaps worth a try? When you have talked to trusty/educated people and have read up and are ready.
@RiotDemon This is great advice. @f00l is right. Start here. Even if their rate is 0.125% higher than what you’re offered in a re-fi the fees associated with the re-fi option at the new bank will make the difference and cost you that money now. Those fees can be around $10k pretty easily.
Those fees are always something to take into consideration when refinancing. How long will it take you to make up that money? Is there a better place to put that $10k that will save you just as much (student loans? CC debt?) Educate yourself, if you’re not super comfortable with money or the maths then go talk to your bank or a local credit union. They can work out all the scenarios and you can choose what works for your budget.
Go talk with the bank/whatever that holds your mortgage. Tell them you just started looking to refinance, and ask how much can they improve on at least three lower rates, with screenshots.
First thought:
Always a good idea to have an account at a credit Union. Even if it’s not your main account. They can be very helpful even if you don’t do a loan with them.
Second thought:
I think it was @PhysAssist who mentioned the pros and cons of going for shorter term.
Pros: lower interest, pay off faster.
Cons:
You can’t just get a loan mod for that; you have to re-fi with all the fees.
You can always out an extra $50 or $500 or whatever against principle under a 30 year note.
The (to me) biggest CON argument:
If you are able to pay down principle, as mentioned above, you will effectively have a shorter loan term and you will pay far less interest.
And if you don’t have the $ to do that during some stressful months, you don’t have to do it. No penalty.
(This last is a huge deal. Who knows what life will throw at you. Except that you know in advance that life will throw a few hurricanes along the way.)
Just be sure you know how to make a payment that all applies to principle and doesn’t just pre-pay your next Principle+Int payment.
Ask the lending processor how to do this and check that the principle payments are properly applied.
And if you are doing online statements rather than small mail ones, take screenshots once a month or something so that you can later track that the extra $ was applied against principle.
I know of someone whose extra payments were misapplied to future monthly payments, despite written and verbal instructions, and she had to have a huge fight with the bank to get it fixed.
She found it easier to monitor if she made 2 separate payments
The first regular (principle and interest)
The second principle only.
It worked, with some vigilance.
Congrats on staying to plan this process!
If you are uncertain about $ and long term fin health; I don’t use this program:
But I know people who swear by YNAB aka “You Need A Budget”.
And @mike808 loves it.
The forums on the site are I hear v useful, both for program specifics, and for general $ wisdom.
Afaik that program does NOT trot out your contact info to all their “partners”.
And does NOT try to steer you to certain service providers.
I don’t think they make $ of referrals and data sales.
Tho check that …
@f00l TL;DR
also you said:
This was not your first thought, your first thought was posted up there. LOL
@therealjrn
Ooooh!
/giphy “technical foul”
Goodie for me!
@f00l
/image yellow warning card
@therealjrn
TS;DR
If you have an FHA loan, you can’t do it unless you already have like 20% in equity of the current home value.
One thing I did back when I owned a home and refinanced, I kept paying what my amount was before every month I could but didn’t worry if I couldn’t. you can only do that if overpayment goes to principal always, which mine did. Shaved a ton off and allowed me to flex a bit around the holidays.
That being said after 30 years a home owner, I love apartment living, LOL
Got the actual figures from the company that will save me over 1.125%
Their closing fees are so high it’ll end up only saving me $100 a month. Currently waiting for a reply from the bank that owns my mortgage and if I don’t get a decent reply there, I’ll contact my credit union.
Thanks everyone.
Glad you saved on the refi. I’m at a 3.65% fixed with just over 10 more years left, so a refi won’t save me much, nor will the interest deduction be worth much, especially after Trump gutted it to pay for ramming that tax cut for the rich (100M+) down the throats of everyone else.
All I can contribute:
@ThomasF Finally a song to replace “baby shark” in my head.
Get a leg up on the pile 
@ThomasF thank you, very cool.
Talked to the bank that owns my mortgage. They can refinance for the same percentage as my first offer, but their closing costs are half the amount.
This is what I was told before they actually pull my credit. They want $30 to get my credit report… So I told the guy to call me back Monday. I’m kind of annoyed that I have to pay for a credit report so I don’t know yet.
I’m wondering if it would be better to wait until I pay more so I can get rid of mortgage insurance. Or wait until I redo my kitchen so maybe it’ll appraise higher.
@RiotDemon Equifax and TransUnion and FICO don’t work for free. The bank is just passing on their cost is all. Plus, you will get a “hard pull” on your credit report and the number of those does affect your credit score. If you’re paying, I would insist on getting a copy - the one with the score and which formula they were using. Yes, there are multiple scoring formulas for different kinds of lending - like mortgages vs a car vs a credit card vs a lease or rental vs car insurance or “instant” credit.