Category: Saving Money

2019 Summer Market Update With Jim McMahan: Is it a good time to refinance?

In this video, Jim McMahan, President of Benchmark Mortgage, talks about the market, interest rates, and debt strategy to help you decide whether refinancing might be a good option for your financial goals.

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.

Win The Bidding War With Storytelling

by Jason Haeger

Get your offer accepted without the highest bid. Can't raise the competition with a higher offer? Use storytelling to win the seller over. Read it here.

Does it Make Sense to Refinance? 5 Things To Know

by Jason Haeger

If you are thinking about refinancing, you probably have a good reason. Maybe you are curious if you could save money by locking in a lower interest rate. Maybe you wonder if you could use some of the equity you have established in your home. Whatever your reason, here are 5 things to know before deciding if refinancing makes sense for you.

1. There are Good Reasons To Refinance

Not sure if Refinancing is a good idea? While refinancing may not be the best choice for everyone, there are a few good reasons to refinance.

A. A Shorter Mortgage Term

Maybe you are motivated to pay off your home sooner. If so, by refinancing to a shorter term mortgage (for example, a 15 year mortgage from a 30 year mortgage), you could set yourself up to be paid off in nearly half the time, depending on the maturity date of your existing mortgage.

Shorter term mortgages often come with smaller interest rates than their longer term counterparts. This can make the increased mortgage payment easily justifiable with the potential decrease of interest payments overall.

B. A Lower Interest Rate

Maybe you bought when interest rates were higher. While timing the market is a risky practice, at best, if the current average interest rates are significantly lower than the rate on your current mortgage, refinancing may look like an attractive option.

C. A Lower Monthly Payment

If your current mortgage is a few years old, refinancing into a new mortgage with the same term could reduce your monthly payment obligation. While this will likely increase the total interest you will have paid over time, the lower payment could free up cash for other expenses or goals.

D. Trade an Adjustable Rate for a Fixed Rate

If you opted for an adjustable rate mortgage due to a lower starting interest rate, you have likely noticed the periodic shifts, up or down, that your interest rate may have taken since originating your mortgage. If you are seeking a little more financial consistency, refinancing with a new fixed rate mortgage may be an appealing option.

E. Access The Equity In Your Home

Has your home increased in market value since you bought it? Do you think your equity could be used better than being tied up in your home? A Cash Out Refinance may be for you. Mind the risk!

F. Consolidate Debt

Do you have other debt with higher interest rates? Do you think it would be a good idea to roll that debt into your mortgage instead? A Cash Out Refinance may be an appropriate option for you. Just like above, we strongly recommend that you mind the risk!

G. Drop Private Mortgage Insurance (PMI)

Low down payment mortgages are a great way to take advantage of the right opportunity, but it comes with Private Mortgage Insurance. In order to get a new loan without PMI, you will have to have at least 20% equity in your home. If you have that, dropping the added monthly expense for the PMI could help pay your home off sooner (with a shorter term mortgage), or result in more available cashflow on a monthly basis.

2. Pay Attention To The Term

The Amortization date (or the time until the death of the loan) is an important aspect to consider if you think you may want to refinance your home. A longer term (like the common 30 year mortgage) will have lower monthly payments, but means you will be paying more interest overall, and paying for more years. A shorter term, like a 15 year mortgage, benefits from less overall interest cost due to fewer interest payments. Shorter terms also often come with lower interest rates than their 30 year counterparts, helping you save even more over the long run. However, a shorter term also means higher monthly payments, as the principle is spread over a shorter period of time.

Deciding which term is right for you will depend on your monthly cash flow, and your personal goals. Your loan officer can help you to determine the right loan for you.

3. Crunch The Numbers

The costs associated with Refinancing can be complicated, when all is taken into consideration. If your goal is simply to save money, it may or may not make financial sense to refinance. Your loan officer can help you consider all facets that may effect the overall cost or benefit of a refinance.

If you are refinancing for a different reason, do the math to be clear on where you stand. A mortgage is a big commitment, and it’s a good idea to thoroughly understand the new agreement before jumping in.

4. Know The Break-Even Point

Total Closing Costs / Monthly Savings = Break-Even Point

The “Break-Even Point” is calculated by a simple formula, dividing the total closing costs by the monthly savings. The calculator linked below can help give you an idea about what your break-even point might be. This is the point in the life of the new loan where the new mortgage effectively pays for its own closing costs.

Calculators

Why is this useful? If your goal is to save money, you may want to stay in your current mortgage if you plan to sell your home before the break-even point. Selling before you’ve reached the break-even point will end up costing you more overall.

5. Know The Risk

As mentioned earlier, a mortgage is a big commitment. There is always risk present when taking out a loan, especially when defaulting means losing your home. This is especially important to consider before taking a Cash Out Refinance to consolidate debt, especially debt that is not secured.

If you miss payments on a credit card, or student loan, you will have collectors giving you a hard time. If you the same debt is rolled into a mortgage, it becomes guaranteed by your home. Defaulting on a mortgage could result in losing your home. While consolidating high-interest debt into a low-interest mortgage can be a good long-term strategy, it may not be for everyone.

Be Smart: Talk To Your Benchmark Loan Officer Today

At Benchmark, we do more than sell a low interest rate. We look closely to help you determine the right loan for you. Even if you don’t feel ready, talking to us now can help you set a course for success.

Find your Benchmark branch, and contact them today for more information.Give us a call or contact us today. At Benchmark, we’ve got your back.Give me a call, send me an email, or request a call today. Along with my Benchmark community of mortgage pro’s, I’ve got your back.

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)

Mortgage Applications Rise 4.1% According to Most Recent Data

by Steve Remington

The Mortgage Bankers Association reported a 4.1% increase in mortgage applications from the prior week.

Steve Remington, Benchmark’s Chief Operations Officer, noted that the increase in applications could be a consumer response to the recent trend in the market, indicating a shift from the prolonged period of low interest rates.

“Mortgage Bankers Association Data indicates a slight uptick in refinances for people who might be trying to take advantage of these lower interest rates. We don’t foresee doom and gloom with rates skyrocketing, but we do see an upward pressure of interest rates in the short term,” says Mr. Remington.

He also suggests that people in the process of building a home, or looking to build a home, may wish to consider looking at options to lock in their interest rates early. “If you are building a house and it takes 6-12 months to build, you might consider seeking a long-term lock option that Benchmark may be able to offer.”

You can read the full report from the Mortgage Bankers Association here.

How To Prepare Your Home For Winter

by I Am Benchmark

It’s That Time Of Year Again

Winter officially begins on Thursday, and if you haven’t already winterized your home, it’s time to take action. Follow these steps to keep the comfort in, keep the cold out, and ensure your family’s safety. The energy cost savings doesn’t hurt, either, so get to it!

Seal Drafty Windows and Doors

Exterior door and window leaks are the biggest source of energy loss when (baby) it’s cold outside. You can help prevent the heat sneaking its way out, and the cold creeping its way into your cozy home by sealing the gaps. For gaps at the edge of windows, you can simply caulk the gaps. (Be sure to cut out old caulk for best results.) For gaps between panes on newer windows, a little bit of weather stripping can go along way in keeping winter out. On older windows, short of reglazing, you can use weatherstripping or caulk to seal gaps.

For doors, check the weather stripping where the door seals. At dusk, you can check from outside for light getting through cracks. For all window and door leaks, you can light a candle, and hold it near potential gaps in windows and doors to check for a flicker caused by escaping warm air, or entering cold air.

little girl sitting by window in winter

Don’t Heat Vacant Rooms

room hvac vent

If you have any spare rooms, or rooms that are rarely used, keep the doors to them closed, and close the vents in them. This will prevent your central heat from working to heat unused space. Unless someone decided to start using the vacant room, no one would notice the sweet savings on your energy bill.

A bonus tip, if your home has more than a single story, you can partially close the vents on the top floor, and keep the doors to frequently used rooms open. Be careful, though. If your air handler is oversized for your house, this could put unnecessary stress on it, causing it to die prematurely.

Blow the Warm Air Down

Ceiling fans are fantastic for cutting cooling costs in the summer. The breeze effectively reduces the perceived temperature, meaning you can turn the thermostat up a couple of degrees to lighten the load on your air conditioner unit. What about in winter?

Most ceiling fans have a switch to reverse the rotation direction that the blades spin. While you don’t want to feel the breeze when you’re trying to stay warm, you do want to generate circulation of the air in the room to even out the temperature between the top of the room and the bottom. Switching your ceiling fans on in reverse direction accomplishes this. No longer will the risen warm air stagnate against the ceiling, leaving the heat from your furnace under-appreciated. You can set your thermostat a couple of degrees lower, to lighten the load on your furnace, while staying comfortably warm when it’s cold outside.

ceiling fan

Check Safety Systems

testing a smoke alarm

Test your fire and smoke alarms, your carbon monoxide sensors, and your security system components to make sure the batteries are good, connections are secure, and CO sensors have not yet expired. Fires and carbon monoxide are both more common during cooler months, and holidays are also a time when thieves may be after the presents under your tree, unfortunately. Don’t forget to check mounting brackets and wiring for external security cameras and motion sensing lights. Being safe is essential to feeling cozy at home.

Stock Up and Be Prepared

Start with keeping a backup stock of food in case you are stuck inside due to snow or ice. It also makes sense to check your first aid kit to see if anything needs to be replenished, or buy one if you do not already have one. Keep extra stock of prescription medications, just in case you are unable to get a refill when running low. Make sure you have a means of opening cans in the event that power is lost. Keep firewood on hand, or another means of keeping warm. Keep emergency numbers handy, and keep your cell phones and any supplemental power banks for them charged. Stock up on batteries, test your flashlights, check your fire extinguisher(s), and keep several gallons of potable water on hand. In the event that you need these resources, your future self will thank you later. So do something nice for yourself and your family: be prepared.

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.

Summer Water Conservation Tips For Your Home and Garden

by I Am Benchmark

Being our most important natural resource, conservation of fresh water is a universal responsibility. Here are four simple ways that you may be able to reduce your fresh water footprint and save on your water bill.

Use Less On Lawn Care

Did you know that nearly 60% of a person’s water consumption may be used on lawn and garden care?* Having a great lawn can really keep your home looking its best, but are you giving yours too much love? By just watering at the right time of day, you can prevent evaporation, with means the water sprayed is actually held in the soil to keep your plants and lawn watered throughout the day. It is recommended to water early in the morning, and to avoid watering during windy weather. It also makes sense to limit the amount of time spent watering, and during rainy seasons, it isn’t necessary to water every day. By cutting down on just a few minutes of watering, you’ll save money on utilities, several gallons of water, and your garden will still look stunning!

* http://www.nationalgeographic.com/environment/freshwater/water-conservation-tips/

Mulch Is Soil’s Best Friend

By adding a layer of mulch, you prevent evaporation, keeping soil is kept moist for longer. Not only is mulch water efficient, but it contributes by adding visual contrast to landscaping. Since it comes in a variety of materials and colors, you can also choose a color to accent your house and landscape. Synthetic mulch and wood mulch are the two most popular kinds. Synthetic mulch made from recycled products last for many years, and are a popular choice for playgrounds. Natural wood mulch will need to be replenished annually as it breaks down, improving soil by adding organic matter and slow release compost. If your garden has a lot of water runoff, which mulch is important since some wood mulches can wash away more easily than synthetic (rubber) mulch. Many homeowners prefer wood chips because of their natural look and tendency to stay grounded on windy days.* As wonderful as mulch is, there is another way to be water smart in the garden. You can also use rain barrels to collect rainwater, which is free of chlorine, plus a little added nitrogen picked up in the atmosphere on its way down. Every drop counts!

* http://homeguides.sfgate.com/comparison-between-rubber-mulch-wood-chips-51700.html

Water For Washing

Do you enjoy a relaxing bath at the end of a long day? Did you know that it takes ~70 gallons of water plus the energy required to heat it? Showers are a great water smart alternative since they don’t use nearly as much water, especially with a low flow shower head.*

This goes for washing dishes, too. Typically, water usage for washing dishes isn’t very high, but every little bit adds up. A completely full dishwasher prevents the need to hand wash every dish individually, with the following rinse in the kitchen sink. Modern automatic dishwashers are designed to be efficient and use a minimal amount of water.* Not to mention the time and energy it saves!

* http://www.nationalgeographic.com/environment/freshwater/water-conservation-tips/

Drinking Water

Since bottled water is transported great distances before it is consumed, it is better to avoid it when possible. Many bottled water companies also use a reverse osmosis system to produce their products. Even though Reverse Osmosis (RO) is a popular option for taste and quality, the bigger picture effects on conservation may be surprising. For every gallon purified by RO, four gallons (up to 12) are wasted. By using an inline or gravity water filter, you only use the water you drink, and no water is wasted. Most vendors offer water filters at a reasonable price with many only needing to be replaced once every six months or more. Other kinds of water wise treatments include UV filters, Alkaline Water Ionizers, and others. By finding what works best for you, you can keep your lifestyle and help conserve our most important natural resource.

* http://www.softwaterfiltration.com/water-filters/

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.