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.

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.

Could refinancing save you money?

If you’re a homeowner, you might think that all the recent talk of low mortgage rates doesn’t affect you. But that isn’t true — they may be your key to savings.

Even if you had a sizable down payment or received a competitive interest rate at the time, refinancing your home now could mean saving thousands over the life of your loan. Ask yourself these four questions before making up your mind:

  1. Have your finances improved? If you have a better financial profile now than when you bought your home, you may be able to make a larger monthly payment with a lower interest rate, speeding up your mortgage repayment. If your credit score has improved or you have a higher income, this applies to you.

  2. How much have interest rates dropped? Mortgage rates fluctuate with changes in the economy. You may be able to obtain a more cost-effective mortgage today than when you first purchased the property, even if rates have only dropped by a percentage point.

  3. How much will refinancing cost? The process will likely cost you a percentage of the amount you borrow. Remember the application and appraisal fees when you bought your home? They apply here too. Another thing to consider: If your home interest payment is a tax deduction, a decrease in your interest amount could lower that deduction.

  4. How much longer will you be in the home? If you’re not planning to stay in your current home very long, and therefore won’t need to pay off the mortgage, refinancing shouldn’t be your top priority. Spending the time and money on that process won’t pay off like it would if you stay in your home for another 10 years or more.

Are you ready to refinance? Do you have specific questions about your situation? Reach out today.

Yes, You Can Save Money And Pay Off Debt

If you’ve got a mortgage, you probably want to pay it off sooner rather than later. But how do you do that when you’re busy just getting by? More importantly, how do you do it while also saving for the future?

It takes the right planning, tools and mindset. But paying off your loan and saving for retirement at the same time is an attainable goal. Start with these steps:

1. Use windfalls strategically. Are you expecting a bonus or a big tax refund? Don’t spend it all on new clothes or a fancy vacation. Instead, use that windfall to get one step closer to your goals. Put at least some of the money in a high-interest savings account, or use it to make an extra mortgage payment.

2. Make realistic savings goals. Everyone would love to have millions in the bank, but that isn’t always possible. Instead of shooting for the stars, set realistic, incremental savings goals. That way you can reach them while still supporting your household.

3. Create a budget. Planning where your money goes ahead of time can be super useful. You should create an overall budget, mapping out how much to spend on items like entertainment and groceries. Again, make sure the budget is reasonable for your family’s needs. 

4. Find helpful tools. You don’t have to go it alone. Money-saving tools and budgeting apps can help you cut costs and save more. Best of all, they’re conveniently available on your phone.

When it comes to saving and paying off debts, staying the course is crucial. And you might even be able to make it easier by refinancing your mortgage. Reach out today for more information.