Get Ready to Set Your 2021 Finance Goals

No matter what your current situation looks like, there are often opportunities to improve your financial strength and build wealth — especially when it comes to homeownership.

So sit back and think: What financial goals do you want to achieve? Whether you’d like to save money, stop paying rent, pay off some debts or improve your credit score, 2021 is the perfect year to do it.

Let’s take a look at four ways you could start to improve your financial situation:

Boost your savings. Remote work arrangements and cutbacks on entertainment and travel have made it easier for many households to save. Now may be a good time to take stock of your savings efforts and start stowing more away in a high-interest account — especially if you want to buy a home. Be sure to consult your financial adviser.

Buy a house. If you’re a renter, you’ve probably dealt with rising rent prices for some time. This may be the year to make a change. With current mortgage rates, you may be able to afford more than you think (or maybe even get a monthly mortgage payment lower than your rent).

Refinance your home. Those low interest rates can help homeowners, too. Refinancing your mortgage could lead to a lower rate, meaning a reduced monthly payment and lower costs in the long run.

Improve your space. You can also leverage the home equity you’ve built up via a home equity loan or line of credit (HELOC) or a cash-out refinance. Then, use that money to renovate your house and improve its value. Enjoy the upgrades now, and reap the profits once you’re ready to sell.

Get in touch today to discuss your 2021 home finance goals.

4 Ways to Accomplish Your Money Goals

Whether you’re planning to buy a new home, refinance your existing mortgage or stow away extra cash for retirement, having good financial habits in place can help.

Those habits should include managing your bills, budgeting, keeping an eye on your credit score and more.

Are you looking to achieve some financial goals or get better at handling your money? These four tips could help you get there.

  • Automate your savings. You can set up savings deposits on a weekly, biweekly or monthly basis. You might even be able to get a small portion of each paycheck deposited into your account automatically.

  • Pay all of your bills on time. If you can automate your bill payments too, do that. If not, you can set up reminders before each bill’s due date. Late payments could hurt your credit score considerably.

  • Download a budgeting app. There are a variety of finance apps, and they can help you keep your spending and saving on track. Some even come with free credit monitoring alerts.

  • Look for small ways to save. There are so many methods for saving. Maybe you’ll find success with coupons, cooking at home instead of eating out or turning off the lights and unplugging devices when they’re not in use. You’d be surprised how little changes can add up.

Improving your finances doesn’t have to be complicated. If you make small adjustments to your spending and saving habits now, you could reap the benefits for the long haul.

And if you have questions about home financing, be sure to reach out.

How to Build More Equity in Your Home

Home equity is the stake in your home you actually own. The more equity you have, the more you stand to gain when it’s time to sell later on.

You can also tap home equity via loans or lines of credit when you need to pay for home improvements, medical bills, college tuition or any other costs that you might be dealing with.

Do you want help increasing the equity you have in your home? Here are five simple ways to do it:

  • Choose your neighborhood carefully. Buy a house in an area where home values are on the rise. When the value of your house increases, so does your equity.

  • Make a bigger down payment. Down payments go straight toward your home’s price. That means that the larger your down payment is, the more equity you’ll have from the start.

  • Pay down your mortgage. The lower your home loan balance goes, the larger your share in the home gets. Consider putting windfalls (like tax refunds) toward your loan each year.

  • Make smart upgrades. Remodeling your home can increase your property value, so choose your home improvement projects wisely. But remember that, while your equity will rise, so could your home insurance costs.

  • Refinance to a shorter loan term. Going from a 30-year mortgage to a 15-year loan could allow you to pay off your mortgage — and build equity — faster.

Want to talk more about equity and the financial options it affords you? Get in touch today.

4 Scenarios for Adjustable-Rate Loans

A 30-year, fixed-rate home loan isn’t right for everyone. Depending on your plans, it might actually cost you more in the long run.

Though they’re less common, adjustable-rate mortgages (ARMs) are a better fit for many homebuyers. They may offer a more affordable monthly payment and cost less in interest throughout the life of the loan.

Are you thinking of buying a home or refinancing your current one? Here are some scenarios in which you might want to consider an adjustable-rate loan:

  1. You only plan to live there in the short term. ARMs are a great option if you only plan to be in the house for a few years. They usually come with lower rates than long-term, fixed-rate loans for the first five, seven or even 10 years.

  2. You expect to make more money down the line. These loans tend to come with low rates upfront. Then, after a few years, your rate can change — which means a possible increase. If you know you’ll have the income to support a higher payment down the road, then an ARM might work for you.

  3. You’re comfortable with refinancing in a few years. Another option would be to refinance to a fixed-rate loan during the initial period of your ARM. It would be similar to going through the home loan application process again, but you could end up with a new low rate for the long haul.

  4. You plan to pay off your loan early. If you’re able to pay off the loan before your rate can rise, you may save overall. Some loans do carry prepayment penalties, but you’ll learn if your loan is one of them early in the process.

ARMs are a bit more complex than fixed-rate mortgages, so make sure to reach out for more personalized guidance.

Add a Touch of Warmth to Your Home

As the days get shorter and temperatures begin to drop, indoor living becomes the norm. But just because it’s cold outside doesn’t mean your home’s interior has to be chilly, too!

With a little imagination — and redecoration — you can create a cozier living space and enjoy a warmer winter hibernation.

Here are four ways you can use decor to add warmth to your home:

1. Use area rugs to divide larger spaces.
Airy, open rooms with sparse furniture arrangements can often feel cold and lonely. By simply adding an area rug or two, you can break these spaces into smaller, more well-defined living areas. A corner area rug could offset a small office area, while a larger rug could tie together an informal dining area.

2. Arrange furniture to create a sense of intimacy.
Always choose and arrange furniture with the purpose of your room in mind. If your furniture is spaced too far apart, it will make conversations awkward and strained. And you wouldn’t want the furniture in your reading nook to be uncomfortable.

3. Take advantage of natural materials.
If your home boasts natural woods or exposed brick, these are elements that can be tastefully incorporated into your design plan. Imagine how a natural wooden coffee table could be used to complement vaulted ceilings with exposed wood beams.

4. Get creative with color combinations.
A touch of color can immediately impact the perception of a room. If you’re looking for a warm, autumnal feel, go with a variety of rich red and orange tones. Use throw pillows, blankets and other textured accents to make the room pop. A basket full of quilts can be both convenient and aesthetically pleasing.

Want to make a more substantial change to your home, such as installing a brand-new fireplace? Reach out to discuss your financing options.

Get Your House-Hunting Checklist

There’s a lot to consider when you’re searching for a home. You have to ask important questions: Which features are must-haves and which ones are simply desirable? How far are you willing to commute to work, grocery stores and other frequently visited places?

Some of the decisions you have to make during your home search are a little bit more fun, like which architectural styles you prefer and what fixtures and finishes you’d like to have. And it’s important to note these details.

So once you’re preapproved for a mortgage, start your search off on the right foot with a house-hunting checklist. Bring it with you while touring homes, checking things off and taking notes so you can more easily compare each option.

Get the checklist below to make your next home search go smoothly.

Click here to get your checklist.

Should you remodel your home or move?

You love your home. You’ve made it your own and have lots of happy memories there. But maybe it no longer suits you and your family as well as it did before.

Maybe it’s too small or lacks the features you need — or you might simply want something different. Either way, it’s no longer the dream home it once was.

When this happens, you have two options: buy a new place or remodel your current one.

Not sure which is best for your situation? Here are some pros and cons of each:

Planning to make a move?
On the plus side, you get a new home that meets all your needs — and maybe even a better location. And you won’t be stuck in a construction zone for weeks or months on end.

But on the other hand, you’ll probably need to deal with selling your house and buying a new one simultaneously, which can be complicated. You’ll need the money for a down payment, closing costs and the actual move.

Think remodeling is the answer?
Advantages of remodeling include staying put and avoiding the time, cost and stress of moving. You might increase your home’s value as well, which could mean more profits if you decide to sell later.

The downside? Renovations aren’t always quick or easy. You might be surrounded by construction, contractors and materials for months. It also has its limits — you may not be able to achieve everything you want.

Though both routes have their pros and cons, the right choice depends on your budget, the real estate market and your family’s preferences. If you’re not sure, reach out for guidance. We can also discuss your financing options for a remodel or a new home.

Home Loans Don’t Have to Be Confusing

There’s nothing like walking into a house and realizing it’s the one — your dream home!

But before you go house hunting, you should get preapproved for a loan that’s just as perfect for you. Making sense of the financial language might initially seem intimidating, but it’s the first step to living that dream.

Get in touch if you’d like help answering the following questions:

15 or 30 years?
If paying off your loan sooner is important to you, a 15-year mortgage might be a good fit. These typically have a lower interest rate, but you’ll have a higher monthly payment due to the shorter loan term.

If you need (or want) a lower monthly payment, a 30-year mortgage might be better suited to your lifestyle.

Fixed or adjustable?
Fixed-rate mortgages are generally uncomplicated and have specified monthly payments that make budgeting easier. You neither save when market rates go down nor suffer when they spike.

Adjustable-rate mortgages (ARMs) typically start with lower interest rates that stay fixed for a set amount of time. Once that period ends, your rates vary at predetermined intervals.

Conventional or government?
The typical 20% down payment you’ve probably heard about is associated with conventional loans, but it isn’t a must. Your credit score, debt-to-income ratio and down payment all factor into your interest rate.

Don’t have a big down payment or excellent credit? Consider a government-backed loan. With an FHA loan, you only need a small down payment, dependent on your credit score. The VA offers mortgages with no down payment to active military, reservists, veterans and spouses. And if you’re in a rural area, you may qualify for a zero-down USDA loan.

Curious about which type of home loan will be the best fit for you? Reach out today.

Does your home need extra protection?

You’ve just purchased insurance for your new home. But now you’re wondering if you’ll receive reimbursement if your detached workshop or beloved antique vase is damaged in a fire.

The ins and outs of homeowners insurance can be tricky, but having the right plan to protect your property and assets is essential. You can talk to your insurance agent anytime to set things straight or adjust your coverage.

Let’s go over what the typical insurance plan covers — and what it doesn’t.

  • Covered: Dwelling Protection
    This covers your home’s structure when there’s catastrophic damage caused by fire, theft and more. It should also cover separate structures like sheds, garages or workshops on your property.

    Extra: Flooding and Earth Movement
    If you live in an area that’s prone to earthquakes, flooding or landslides, you’ll need to get a separate policy to cover your home and belongings.

  • Covered: Personal Property
    This aspect of your policy refers to standard household items, like furniture or electronics, that are damaged by a covered risk.

    Extra: Endorsement or Floater
    For high-value items that exceed standard reimbursement limits, like jewelry and rare collectibles, you’ll probably want to extend your personal property coverage.

  • Covered: Liability Coverage
    If someone who doesn’t live in your home gets injured on your property, liability coverage pays for their medical bills or legal fees. It should also cover you if you (or a member of your household) damage a neighbor’s property.

    Extra: Umbrella or Excess Liability
    Think you may need more coverage than what’s provided by your standard homeowners policy? It’s a good idea to talk to your agent about this broader coverage.

Your homeowners insurance doesn’t have to be standard. You can adjust your deductibles, add on extra protection and fine-tune your coverage as your needs change.

Get in touch if you want to know more about homeownership or need an insurance agent referral.

Don’t Fall for These Credit Score Myths

Your credit score plays a vital role in your financial health. It can impact your mortgage options and determine whether you can take out a loan or secure a credit card. Your score could even affect your living arrangements since many landlords use credit checks when evaluating a new tenant.

Unfortunately, there’s a lot of misinformation about credit scores — particularly what raises and lowers them.

Are you concerned about your credit score? Don’t believe these all-too-common myths:

Myth No. 1: Checking your score will hurt it.
A hard credit check will slightly reduce your score. Those generally only occur when you’re applying for a new loan or credit card. But pulling your annual credit report or checking your score through your bank is a soft check, and it won’t decrease your score.

Myth No. 2: Closing an account will help your score.
Your credit history — or how long you’ve had open accounts — plays a big part in your overall score. Because of this, closing a long-standing account can negatively impact your score, especially if you don’t have other long-term accounts in your name.

Myth No. 3: Small balances raise your credit score.
Your credit utilization rate matters: You don’t want to carry a large balance because that can lower your score. But even carrying a small balance when you could pay it off means you’re spending more on interest.

Myth No. 4: Your income influences your credit score.
Your credit score is only based on how you manage borrowed funds — things like credit cards and loans (including car, student, personal and mortgage loans).

Reach out to learn more about how your credit score impacts your options when buying a home.