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.

Using Gift Money Toward a Down Payment

Down payments can be a big hurdle when buying a home. In fact, nearly a third of first-time buyers received money from friends or relatives to source their down payment.

Are you considering a similar move? If so, proceed with caution. Though getting gift money is quite common, it also comes with some unique challenges.

Here’s what you should do to make sure your down payment gift goes off without a hitch:

  1. Know the rules and regulations around your loan. Different mortgage products have different rules for gift money. The allowed amount may be limited, or the funds may need to be deposited in a certain time frame in order to qualify. We can discuss these specifics together.

  2. Make it clear that you’re not expected to repay the money. If you’re taking on more debt, it will impact your home loan finances. To prove that it’s a gift instead of a loan, you’ll need to ask whoever is giving you the money to write a gift letter, asserting that it does not need to be repaid.

  3. Keep it in your account for a few months beforehand. Ideally, you should get the gift money a few months before you apply for your mortgage. Anything beyond 60 days out should work, and you’ll avoid an unusual deposit during the loan process.

  4. Understand the tax rules around gift money. You won’t have to pay taxes on the money, but depending on how much you’re given, the gift-giver might have to. Make sure they’re aware of these implications before moving forward.

If you’re one of the many buyers considering using gift money for your down payment, reach out today so we can walk through the process.