Capital One Is Exiting the Mortgage Business: Here’s What it Means for Borrowers

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Capital One announced Tuesday that it would shutter its profit-losing mortgage and home equity origination businesses.  

As a result, the banking and financial services company will cut about 900 mortgage-related jobs in three states, a Capital One spokesperson told MagnifyMoney via email.  

In addition to its mortgage loan business, the banking and financial services company offers a variety of products that includes credit cards, checking and savings accounts and auto loans.  

But the company has struggled to make its mortgage business as profitable as the competition. Capital One originated $901 million in home loans in the third quarter of 2017, but that wasn’t enough for the bank to make the list of top 40 mortgage providers, according to Inside Mortgage Finance, a trade publication. 

“Given the challenging rate environment in this space, we are structurally disadvantaged and we are not in a position to be both competitive and profitable,” the company’s spokesperson said. 

Ted Tozer, senior fellow at the Milken Institute (a nonprofit, nonpartisan think tank focused on global prosperity) and former president of Ginnie Mae, told MagnifyMoney that Capital One’s exit should not have a negative impact on the home lending business because it has not been an effective player since it entered the space some eight years ago.  

“It’s come to light that they don’t have a cost-effective operation because they really haven’t invested in technology,” Tozer said. 

In fact, he said, this will be good news for the industry because other financial institutions will then absorb Capital One’s customers in an increasingly competitive business. 

The competition in the home lending business has grown fiercer as interest rates rise, driving fewer homeowners to refinance, Tozer noted. The country is also still experiencing historically low homeownership rates.  

Nonbank financial institutions that have sprung up since the Great Recession are taking an increasingly big slice of the business. Legacy banks such as Capital One are losing customers to industry disruptors, like Quicken Loans, that have invested heavily in technology to streamline the lending process, experts say. 

“Everyone’s trying to compete for the fewer borrowers out there and you have to really have a cost-effective infrastructure to be able to compete in this kind of cut-throat environment we are going through right now,” Tozer said.  
“Capital One is hamstrung by old technology, whereas the new nonbanks are doing this 21st-century technology, and they are able to get the consumer a better experience for a cheaper price.” 

So how will the end of Capital One’s mortgage business actually affect consumers?

If you were hoping to get a Capital One mortgage …

You’re out of luck. Capital One is not going to take additional home loan applications effective immediately.  

If you have a Capital One mortgage or home equity loan already …

Not much will change for you. The bank will continue to service the loans in its portfolio. The company’s spokesperson told MagnifyMoney that consumers who have a loan in process or whose loan is being serviced by Capital One can continue to access their accounts the same way they’ve done so far – through digital means, by phone or by visiting a bank branch. 

If you are the middle of processing a Capital One mortgage application … 

The spokesperson said Capital One would close all open mortgage applications soon. If a loan cannot be closed promptly, the financial institution will refund any fees would-be borrowers have paid so that they can find another lender. 

Capital One will continue to provide specialized multifamily financing to the real estate development and investment community through Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA), according to to the company. 

Capital One will also continue lending activities for affordable housing supporting the low- and moderate-income markets. 

Experts suggest consumers reach out to their loan officer or customer service to receive an update on their loan if they have questions.   

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Bass Pro Shops & Cabela’s Are Merging: What Their Credit Cardholders Need to Know

Bass-Pro-Shops-&-Cabela's

Whether your choice of outdoor activities involves a fishing pole and waders or sporting clays and shotgun shells, you may want to take note of this outdoor retailer news — Bass Pro Shops is set to acquire Cabela’s, according to a press release issued Monday.

This approximately $5.5 billion deal will merge Cabela’s, Bass Pro Shops and White River Marine Group, a boating company that is part of Bass Pro Shops.

But don’t rush out to use your rewards or certificates just yet. For the most part, this buyout isn’t expected to affect how you shop or the rewards you get for doing so.

According to the merger announcement, “All Cabela’s CLUB points and Bass Pro Shops Outdoor Rewards points will be unaffected by the transactions and customers can continue to use their credit cards as they were prior to the transaction.” The press release also noted that the loyalty programs at both stores will remain the same, but said there is “potential over time to expand the program in the combined company.”

Part of the announcement included news that Bass Pro Shops is launching a credit card partnership with Capital One. An email from a Capital One spokesperson said “the Capital One transaction isn’t expected to close until the first half of 2017 and is subject to the concurrent closing of Bass Pro Shops’ acquisition of Cabela’s,” however.

The spokesperson also noted that “it’s business as usual for Cabela’s customers.” So, whether you’re looking to add some lures to your tackle box or get a new camo duck blind, you should have the experiences at both Cabela’s and Bass Pro Shops that you’re accustomed to.

Getting a Store Credit Card

No matter what gear you need for your next outdoor adventure, it’s important to remember that applying for a store credit card is an important financial decision and shouldn’t be made lightly. If you are a frequent shopper at either (or both) of these stores, it’s a good idea to look at their reward offerings that accompany the card and see if it’s worth signing up for one, or if you could get better perks with a standard rewards credit card.

Either way, it’s a good idea to review your credit before applying for new plastic (you can see a free snapshot of your credit report, updated every 14 days, on Credit.com) so you have an idea of the terms and conditions you’re eligible for.

At publishing time, Capital One products are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Image: Susan Washinski

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Your Capital One Credit Card Could Help You Score Jingle Ball Tickets

Jingle-Ball

Getting tickets to the Jingle Ball tour each winter is no easy task, as each stop tends to sell out within minutes. But landing one of these coveted tickets just got a bit easier for Capital One cardholders. Consider it an early Christmas miracle.

According to an email from a Capital One spokesperson, any Capital One cardholder “is eligible to take advantage of the early ticket sales,” which will happen October 13 at 10 a.m. local market time for each of the 12 cities on the tour. This gives cardholders access to tickets three days earlier than when they go on sale to the general public. Cardholders can order up to eight tickets per transaction and must use their Capital One card to pay, according to the spokesperson.

Plus, one cardholder at each of the tour stops will win the opportunity to head up on stage and announce an artist at the performance. This is the second year Capital One has partnered with iHeart Radio to put on the Jingle Ball concert series.

If you’ve been hoping to catch an up-close glimpse of Charlie Puth or Fifth Harmony — two of the artists announced for the tour (full lineup is expected to be announced October 11) — this card benefit may give you your golden ticket. But, while exclusive entertainment access can be a great perk — and is offered by many different credit card issuers— it may not be in your best interest to buy concert tickets you can’t afford just because you can get them. It’s also not might not be in your best interest to apply for a new credit card just to score access.

Before you sign up for any new credit card, you should read the terms and conditions to be sure it’s right for you. It’s also good idea to review your credit, as having good credit can help you qualify for better terms and conditions. (You can see a free snapshot of your credit report, updated every 14 days, for free on Credit.com.) If you review your credit profiles and discover things aren’t quite where you want them to be, there are things you can do. Consider fixing any errors you discover, paying down debt and limiting any credit inquiries until your scores rebound.

At publishing time, Capital One credit cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Image: PongsakornJun

The post Your Capital One Credit Card Could Help You Score Jingle Ball Tickets appeared first on Credit.com.

Cheaper Hotel Stays for Capital One Credit Cardholders?

CapitalOne-hotel-discount

If you’re thinking about packing up and heading out of town for a vacation, you may like this news. Capital One announced a partnership with HotelTonight, a last-minute hotel deal app, on Thursday. This pairing gives Capital One Venture and Capital One VentureOne cardholders a 10% discount on hotels booked through the HotelTonight app.

To receive the discount, all cardholders have to do is enter the promo code VENTURE, which is applicable through January 2017. This is an unlimited usage discount until the promotion expires, but it’s still a good idea to comparison shop to be sure you’re getting the best deal out there for you.

This new perk comes alongside other travel perks that already accompany these credit cards. With the Capital One Venture Rewards credit card, cardholders receive unlimited double miles on every purchase, as well as 40,000 bonus miles after spending $3,000 on the card during the first three months. The Capital One VentureOne Rewards credit card offers customers 1.25 mile rewards on every purchase and a one-time bonus of 20,000 miles after making $1,000 worth of purchases on the card within the first three months.

Neither of these cards have foreign transaction fees or initial annual fees. However, the Venture card does have a $59 annual fee after the first year. The VentureOne rewards card has a 0% introductory annual percentage rate (APR), but that changes to a 12.24% to 22.24% variable APR after the initial 12 months (based on creditworthiness). The Venture card has a 13.24% to  23.24% variable APR. (For more about these cards, you can read our in-depth review of both the Capital One Venture Rewards card and the Capital One VentureOne Rewards card here.)

Using Travel Reward Credit Cards

It’s important to remember that you don’t want to overspend on a trip just to get perks, whether they’re in the form of points, a discount or something else. And, before you sign up for any rewards credit card, there’s a lot to think about. For example, it’s important to make sure you’ll be able to cover any annual fees that may come with the card. You may also want to review your budget and decide if you’ll be able to pay the balance in full each month — doing so with rewards credit cards helps to prevent you from losing all those added benefits to interest fees.

Finally, you may want to take a look at your credit scores, as these types of credit cards are typically issued to people with good credit. You don’t want to go through the application process and get a hard inquiry on your credit report, simply to get denied for the card. You can see two of your credit scores for free, updated every 14 days, on Credit.com. If your credit isn’t quite up to snuff, there are some steps you can take to polish it — pay down any debts, fix any errors appearing on your credit report and limit the number of credit inquiries until your score rebounds.

At publishing time, the Capital One Venture Rewards card and Capital One VentureOne Rewards card are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Image: stockvisual

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