Ron's Blog

“Refinancing” is a scary word for many people, but that shouldn’t be the case for you. For many homeowners, refinancing can not only lower your monthly payments and help with your monthly budget, but it can save you thousands of dollars in the long run.

YOU’RE NOT TOO LATE.

For years now, we’ve been hearing that interest rates will be on the rise, and although there have been some small increases, you’re still in a great position to drastically lower your interest rate. The general rule is if your mortgage interest rate is more than one percent above the current market rate, you should consider refinancing.

IT’S NOT TOO TIME CONSUMING.

Don’t brush off refinancing just because it seems like a long and daunting process. An informational call with a lender to see how rates compare will only take a few minutes. There are also some programs for streamlining the application process. And besides, isn’t the amount of money you could save worth the time and effort?

ARMS CAN BE REFINANCED, TOO.

Seeing your Adjustable Rate Mortgage (ARM) increase after the introductory period can be incredibly stressful and place a squeeze on your budget. Many people assume they’re stuck, but ARMs can be refinanced, just like fixed-rate mortgages. You can even switch to a shorter term fixed-rate mortgage, such as 15 or 23 years. The longer you’re planning to stay in the home, the more sense it makes to look into refinancing.

Whether you work full-time at home or occasionally need to conduct business in the evenings or on the weekends, a home office a great way to utilize an extra room. A dedicated workspace in your home can be designed to increase productivity and comfort. Here are 5 ideas to get you started. 

1. Invest in a good office chair. Investing in an ergonomic office chair is essential. You may be spending anywhere from 30 to 50 hours a week sitting in it, so your back will thank you. Purchasing one with multiple adjustments is ideal so it fits you just right.
2. Switch up your lighting. Fluorescent lighting has been proven to be hard on the eyes. Make the switch to LED or halogen light bulbs in your home office and try to let in as much natural light as possible. Also, consider finding a desk lamp to reduce headaches and eye strain.
3. Keep essentials in reach and organized. Nothing says productivity like a clean, neat workspace. Select a desk with a lot of storage or install creative shelving to keep items like pens, pencils, extra batteries, calculators, notepads, and more stored within arm’s reach.
4. Decorate bright. Pick a color you love and use it to spice up the room. Use cheery yellow or red or relaxing tones like green and blue, instead of beiges and browns.
5. Aim for the view. If possible, place your desk so you are facing a window instead of a blank wall. Natural light can do wonders for staying alert and you can give yourself a short mental break when necessary by looking to the outdoors.

Studies show that homeownership has tremendous benefits for your mindset, finances and family. Here are some reasons why it pays to own your home now.

• The average homeowner has 44 times the net worth of a renter.
• Buying a home is 33% cheaper than renting in the United States.
• Homeowners can often deduct property taxes, mortgage interest and home improvement costs from their taxes, saving money during tax time.
• 75% of non-homeowners in the United States consider buying a home to be part of their American dream, and they plan to jump in eventually.
• Buying a home is a rite-of-passage, that, once achieved, is proven to increase an individual’s satisfaction with life.
• Homeownership leads to more engaged communities, since an owner has a more personal investment in the neighborhood’s well-being.
• Kids of homeowners tend to do better in school, helping them make more money as adults and eventually buy a home for themselves.
• Homeownership contributes to overall economic growth, making up nearly 18% of the economy.

Due to COVID-19, the economic uncertainty in 2020 has resulted in historically low interest rates, which makes this a great time for many buyers to consider purchasing a new home or refinancing their current home. A strong credit score can ensure you receive the best rate possible. So, while 2020 has been an unconventional year, the ways to maintain and improve your credit remain the same. Before you buy a home or refinance, here are a few tips to help you maximize your credit score during a time with historically low rates.

1. Avoid opening new lines of credit. Opening new credit cards or co-signing on a loan result in hard inquiries on your credit report, which can lower your credit score. When shopping for a home loan, it is not uncommon to have your credit pulled several times. The great news is that as long as you confine your rate shopping to a two-week period, the credit bureaus will treat the multiple inquiries as just one instance, which results in only a minor hit to your credit score. The score reduction is usually short-lived and drops off your credit report after two years.

2. Keep credit card balances low. One of the factors that contributes to your credit score is how much of your available credit limit you are utilizing. Maxing out your credit cards may signal to lenders that you already have more debt than you can handle. If paying off credit cards is not an option, then try to pay down card balances.

3. Avoid paying bills late or missing payments. Late or missed payments can cause dramatic hits to your credit score and possibly make you ineligible for certain loan products. Keep your credit score safe by continuing to pay your bills on time. Setting up automatic payments can help streamline this process.

4. Don’t close old credit accounts. The length of time you have had a credit card also impacts your credit score. The longer you have an account open, especially one in good standing, the more it can positively affect your credit score.

Refinancing your mortgage is something most homeowners consider at least once throughout the lifespan of their home loan. It allows you to pay off your previous loan by applying for a new one that has better financial advantages. While there are many good reasons to refinance, here are five common ones.

• Scoring a lower interest rate. The number one reason homeowners decide to refinance is to secure a lower interest rate on their mortgage. Not only does this save you money in the long run and decrease your monthly payment, but you can start building equity in your home sooner.
• Using an improved credit score. Even if interest rates have not dropped in the market, if you’ve improved your credit score over the last few years, you may be able to reduce your mortgage rate.
• Shortening the loan’s term. If interest rates are decreasing, there is a chance you may be able to get a shorter loan term with little to no change in your monthly payment, allowing you to pay off your loan sooner.
• Switching from an adjustable rate to a fixed rate. If you chose an adjustable-rate mortgage with great introductory rates when you initially financed your home, that rate may increase significantly over the years. By switching to a fixed rate while interest rates are low, you can protect yourself from future increases.
• Cashing out home equity. If there is a big purchase or payment on the horizon, such as funding a wedding or going back to school, your best option may be to use the equity you’ve built in your home to borrow money at a lower cost.