Category: Financial Planning

Is a HELOC a good financial choice?

A Home Equity Line of Credit (HELOC) is an easy way to borrow money using your home’s value as collateral. Let’s look into how a HELOC works and whether this option is right for you.

A home equity line of credit (HELOC) works much like a credit card. With money drawn from a HELOC, you can pay for things like home remodeling/repair fees, credit card debts, or even save it for rainy day funds.
A HELOC’s interest rates can be significantly lower than a credit cards

How Much Can You Borrow with a HELOC?

The first step in deciding if a HELOC is right for you is knowing whether you have enough home equity to qualify. This will also determine the amount of the credit line that you’re eligible for.

Your home equity is the difference between your home’s appraised value and your mortgage balance (assuming you have an existing mortgage).

Example: HELOC for a home worth $500,000

if your home is worth $500,000 and you have 50% equity, you may be able to borrow as much as $150,000 in a Home Equity Line of Credit (HELOC).

Let’s break that down.

If your home is worth $500,000 and you owe $250,000, your equity is 50%.

$500,000 – $250,000 = $250,000
- If your home is worth $500,000 and you don’t have a mortgage, your equity is 100% ($500,000 – 0 = $500,000).
To estimate your possible HELOC credit limit, calculate your combined loan-to-value ratio (CLTV ratio, or your line of credit relative to your home equity). Most HELOC lenders allow a CLTV of at least 80% on your main home, sometimes higher.

To estimate, multiply your home’s appraisal value by 0.8. This is approximately how much money lenders may let you borrow against your home. With a home value of $500,000, it comes to $400,000.

$500,000 x 0.80 = $400,000
Then, subtract the amount you still owe on your existing home loan. For our example, let’s estimate that to be $250,000.

$400,000 – $250,000 = $150,000 credit limit for our example HELOC.

So, How Does a HELOC Work?

A HELOC is a revolving line of credit with a variable interest rate, like a credit card. It also has a fixed term and a defined repayment period, like a mortgage.

A credit card’s credit limit is based on your household income and credit score. You can spend as much, up to the credit limit, or as little as you want in each billing cycle. When you get your statement, you have to make at least the minimum monthly payment, but you can choose to repay the entire statement balance if you don’t want to accrue interest. When your payment is processed, your available credit increases by the amount of your payment that went toward the balance. If a portion of your payment is going to interest, this portion will not contribute to your available credit.

A HELOC is similar, but your credit limit is also based on how much equity you have in your home. Additionally, a HELOC has two periods:

First, there is a draw period, typically several years, during which you can borrow up to your credit limit and make interest-only payments.
Then, there is a repayment period, generally several more years, when you can no longer borrow money but must repay your outstanding balance with interest.

What are the steps to get a HELOC?

Apply with a Benchmark online, in person, or over the phone.
You will be asked to submit supporting documents including photo ID, paystubs, tax returns, proof of assets, bank statements, current mortgage details, and other financial information
If approved, Benchmark will issue an initial, conditional approval
Benchmark will order and schedule an appraisal of your home.
Our underwriters will check your application and make sure everything’s in order
Your final approval will be sent by your underwriter
Close the loan and receive funding. Since a HELOC is not a lump sum loan, you’ll receive a special account or card allowing you to access your HELOC as needed

What else should you know to decide if a HELOC might be a good choice for you?

We recognize that not every loan product is right for everyone. There are a few more things you should know about HELOCs.

Like most credit, the better your credit score and credit history, the higher the chances are that you will be approved.
A HELOC is a very low cost way to borrow money, and can be an attractive option if you do not have a substantial amount in savings, and are in need due to a crisis or economic downturn.
You can use a HELOC to pay for almost anything, and funds are easily accessible once open.
If you feel burdened with credit card debt, and you’re looking for a way to save on interest, a HELOC could be a great tool.

Curious to learn more?

At Benchmark, we are committed to listening to your goals and setting you up for future success. To learn more, Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service.

Benchmark brings you home.

15 Tips For An Easy Mortgage Process During The Holidays

by Holly Taylor

‘Twas a crisp, cold, clear night, when we hoped for a house. 
With my hot cocoa stirring, I looked at my spouse. 
We’d mapped out our assets and budget with care, 
In hopes that our offer would not catch a snare. 
The children were nestled all snug in their beds, 
While dreams of new bedrooms danced in their heads. 
My spouse in their slippers, and I in my cap, 
Had just settled down for a long winter’s nap. 
When from my cell phone there arose such a clatter, 
I sprang from my bed to see what was the matter. 
Seeing the name, I answered in a flash;
Our offer was accepted, with a loan, not of cash.
What a gift to receive, our hearts were aflutter — 
In the morning we'll celebrate with hot scones and butter. 
When what to my wondering eyes did appear, 
A little less worry and a little more cheer.
With the offer accepted, I hung up the phone.
Knowing that we were approved for the loan,
What should we do now? We were happy as larks!
The news was like light after uncertain dark,
I feel joy for the mortgage we have with Benchmark!

Your housing timeline may have you moving right in the middle of the holiday season. It can be a crazy time, but that’s no reason not to seize the day and make some holiday memories in a new home.

However, it’s also a season when personal budget planning often gets neglected to make room for extra joy and memories — sometimes with an expensive price tag.

Benchmark is here to help.

As you assess your financial situation, be mindful of your spending. Be aware of your normal budget, and pay careful attention to your holiday expenses.

At Benchmark, we are committed to delivering a smooth and easy mortgage process. Keep these lists handy as you start your home buying process this holiday season:

DO’s:

Keep an eye on your holiday budget — remember not to make big purchases that might affect your credit score.
Keep in mind that interest rates are sometimes lower during holiday months.
Let family and friends know that you have moved addresses so they know where to send your housewarming gifts!

DON’Ts:

Don’t make any large purchases that require credit checks or open new lines of credit. This can affect your credit score and change your loan status.
Don’t wait until the last minute to complete and send the required documents to your loan officer. Doing it in a timely manner will ensure a smooth loan process.
Don’t rush putting an offer on a house just so you can close before the holiday season. Remember, this is a long-term decision.
Don’t use your entire down payment on holiday gifts. Save as much money as you can.
Don’t accept monetary gifts from relatives (e.g., accepting down payment assistance) without consulting your loan officer first.
Don’t open, transfer, or close any asset accounts without first discussing any plans with your loan officer.

This holiday season may look a little different. Maybe you forego large Christmas gifts and stick to a budget to keep your credit score on target and your mortgage process on track. But, your new home will likely be the best gift you receive this season — and we’d say that’s more than worth it.

“Home for the holidays” takes on a whole new meaning!

At Benchmark, we are committed to helping you with your home loan needs and decisions for future success.

Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service for your new loan.

Benchmark brings you home.

Cashout Refi

by Austin Cox

Use the equity in your home to consolidate debt or pay for a repair or renovation with a Cash Out Refinance loan.

How to Refinance Without a New 30-year Commitment.

by Jason Haeger

Now, you could get a refinance loan for any term between 15 and 30 years! Get a better rate without "starting over". Benchmark presents: Odd Term Mortgages.

Can You Afford A Mortgage? 5 Rules and 5 Questions

by I Am Benchmark

Have you ever wondered whether you can afford to buy a house? If so, you are not alone. Here are 5 Rules to remember and 5 Questions to ask yourself.

Nervous About Buying? Here’s A Dose of Confidence

by I Am Benchmark

If you are interested in buying a house, but do not know what you might need, or whether you can qualify, you’re not alone. Many would-be buyers are intimidated by the thought of what it takes to buy a home. Some wonder whether they can afford to buy, if they have enough saved for a down payment, or if their credit is good enough.

Can You Relate? If So, You’re In The Right Place!

Be confident that you can do it! The basics are pretty simple. To qualify in the current market, you will need a down payment (would you believe that you don’t need 20%), a stable income, and a good credit history.

You will have contact with your lender, your agent, and other professionals whose roles help get you into your home. These pros are also valuable resources on your journey home.

5 Easy Steps

Ready to apply? Here are 5 steps to follow as suggested by Freddie Mac:

Check your credit score and history.
Though the average FICO score for closed loans was 731 (September 2018 according to Ellie Mae), there are loan products for a wide range of scores. It’s just a good idea to know where you stand before applying.
Gather your documents.
You will need to be able to verify your income, which you can do with W-2 forms or tax returns, your credit history, and statements verifying cash assets (bank statements, investment statements, and the like).
Contact your loan officer!
Your loan officer can help you develop a spending plan, help you determine how much home you can afford,review your income, expenses and financial goals, and recommend a real estate agent who knows the market and will work for your best interests. With a pre-approval letter in hand, sellers will see your offer as legitimate, and will be more likely to accept. You may get pre-approved by your loan officer. Don’t have one? Find yours today!Meet our team or contact us today!That’s me! Contact me today, or Apply Now!
Contact your real estate agent.
Your real estate agent can help you find the right home for you in your price range, be your advocate in pricing negotiations, and be a great source of advice in the specifics of what you’re looking for in a home, neighborhood, and location.

Take Action

Armed with the information above, you are ready to start doing your own research. Just remember to know how much house you can afford, stick to your budget, and be mentally and emotionally prepared. Making dreams come true takes a little effort and responsibility. At Benchmark, we are here to help make it as easy as it can be.

Ready to get started? Apply now. Want to explore your options? Find your loan officer and contact them today!Contact us today!Contact me today!

Homeownership and Your 2017 Tax Return

by I Am Benchmark

The deadline to file your 2017 tax returns is approaching on April 17th. If you have not filed your taxes yet, you can take this opportunity to talk to your tax professional about how homeownership may impact your tax return this year. Here are a few reasons why you may want to.

Mortgage Interest may be tax deductible

According to the IRS, taxpayers may deduct interest on up to $1,000,000 of their qualified home loan on 2017 tax returns. If you are married filing separately, you can deduct up to $500,000.

Under the Tax Cuts and Jobs Act of 2017, for home purchases after December 15th, 2017, interest may only be deducted on qualifying mortgage debt up to $750,000 when filing 2018 tax returns.

Property Taxes may be tax deductible

Homeowners who itemize deductions on their tax return may be able to deduct property taxes on their primary residence, as well as other real estate they own. Take advantage of this deduction now, because when you file your 2018 tax return next tax season, under the Tax Cuts and Jobs Act of 2017, homeowners will be limited to deducting up to $10,000 in personal state and local property taxes.

Talk to your tax professional

Your trusted tax professional can help you determine how homeownership impacts you as a taxpayer. Be sure to ask about state exemptions, as they vary. The good news is that most changes to the tax code will not affect 2017 taxes if filed before the April 17th deadline. Although several changes that affect homeowners will go into effect next tax season in 2018. While the new law will lower the caps for itemized deductions, the standard deduction will nearly double. So unless you have enough itemized deductions to exceed the increased standard deduction, many of the changes discussed will not affect your return.

Ark-La-Tex Financial Services, LLC NMLS ID #2143 (www.nmlsconsumeraccess.org) is not a law firm, accounting firm, tax firm, or financial planning firm. This advertisement is for general information purposes only. Anyone relying on particular details contained herein does so at his or her own risk and should independently use and verify their applicability to a given situation. (https://benchmark.us)

Purchasing or Refinancing with the HomeStyle Renovation Program

by jacymh

The HomeStyle Renovation Program is available to borrowers who are looking to make Renovations, Repairs, or Improvements to a home with a single loan, rather than with a second mortgage, or home equity line of credit.

At Benchmark, we know how important it is to make a house your own. Your Benchmark loan originator can walk you through the steps of making your homeownership dreams a reality. To find a Benchmark location near you, click here.

At Benchmark, we know how important it is to make your house your own. I am happy to walk you through the steps of making your homeownership dreams a reality. To get started, give me a call, send me a message, or apply now.

At Benchmark, we know how important it is to make a house your own. As your local Benchmark branch, we stand ready answer your questions and walk you through the steps of making your homeownership dreams a reality. To get started, send us a message or apply now.

Why Buying Is Investing

by I Am Benchmark

If you are thinking about becoming a homeowner, it is important to see your house as an investment. A home is an asset with the potential to increase your financial stability over time. Unlike renting, where you pay your landlord’s mortgage without seeing any return yourself, homeownership works to broaden your financial worth. After purchasing a home, owners enjoy an increase in equity as they continue making payments, an increase in property value over time, and a growing net worth as a cumulative result.

You Are Paying Yourself

Purchasing a house helps you build equity. To figure out your equity in your house, subtract your loan’s principal balance from the market value of your home. For example, if your home’s fair market value is $256,000, but your remaining principal balance is $125,000, you have $131,000 ($256,000 – $125,000) in equity. This equity is available to you as collateral for major expense loans for financing your child’s college education, renovation projects, or paying off credit cards.

Asset Appreciation

The value of most purchased items does not increase over the period of ownership. On the other hand, a home is an investment that is likely to appreciate in value. A home’s value gains over time based on local real estate markets and the improvements made to it. If you decide to sell your home, you will could make a profit if the house value at time of sale is greater than the initial purchase price.

Low Initial Investment

Buying a house may appear to be a scary financial jump. Luckily, you do not need to use all of your savings to purchase a house. You can become a homeowner with just a low percentage (determined by credit and financial factors) of the home value needed for the down payment. While your regular payments are paying down the balance over time, the value of your property is probably rising. A short time into your investment, you will have a home that is worth more than what you paid for it at the time of closing. This equity gives you more financial security and an increase in your net worth.

Are You Ready To Own?

Buying a home can be stressful, but it doesn’t have to be that way with Benchmark. When you feel ready to purchase a home, find your branch. A loan officer will match you with the best loan for your financial needs.

Buying a home can be stressful, but it doesn’t have to be that way. When it’s time to buy a new home, give me a call or apply now. I’ll work with you to find the best loan type for your financial needs.

Buying a home can be stressful, but it doesn’t have to be that way. When it’s time to buy a new home, contact us or call your loan officer. We work with you to get the best mortgage for your financial needs.

4 Tips to Save for Your Child’s College Tuition

by I Am Benchmark

Do you have children or grandchildren? If you do, you are likely considering their higher education opportunities long before they have similar thoughts of their own. If trends are any indicator, the cost of four year and two year universities continue to rise every year. As the cost of college increases, planning and investing in your child’s future now becomes even more important.

1. Take Advantage of Merit Based Scholarships

Some families don’t fill out the Free Application for Federal Student Aid because they believe their income is too high for their child to qualify. No matter your income, it is worth filling out. Most colleges offer aid based on high school academic achievements (merit). If you don’t fill out the form, you cannot be considered for those scholarships. You can apply by visiting https://fafsa.ed.gov and clicking “Start A New FAFSA.”

2. Choose an Investment Program

A 529 college savings plan is named after Section 529 of the Internal Revenue Code. This type of plan allows you to steadily grow a designated account that is designated for college tuition and other college costs. As long as the money is used appropriately, the state-sponsored investment plan gets special tax benefits. The money invested in a 529 grows tax free and is also tax free to spend on college expenses such as tuition, books, and fees. Even if you aren’t certain that your child will attend college, it’s still a good investment because you can change the recipient of the money. A grandchild, sibling, nephew, niece, or even you can use that money for education. In some states, the money in a mature 529 account can even be withdrawn for uses other than college.

3. Enroll in Rewards Programs

Some credit cards offer a percentage back when you shop and buy gas. If you swipe a card when you dine out, a using a card with a rewards program would give you some of that money back monthly or quarterly. Although these programs typically award a very small percentage of the purchase, this money can be invested into a designated college savings account or a 529 plan. When the new graduate in your life is ready to begin their higher education, you’ll be thankful for every penny saved.

4. Ask for College Fund Contributions Instead of Socks

Tired of birthday gifts or holiday gift that seem unnecessary? Instead of asking friends and family to buy your child toys, ask them to contribute to a college tuition savings account. Many states offer tax deductions for financing a college account, even if the child is not your own.

Plan Ahead

While it may be unrealistic to work one’s way through college like in decades past, all hope is not lost. Like all investment strategies, your biggest ally is time. With the right strategy and an early start, a debt free education really is possible.