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Mortgage Planning

Sounding like a broken record can be a good thing

It’s a refrain we’ve been repeating a lot lately, yet it’s one we like to hear: Home values are still rising in most places, and mortgage rates are still near historic lows.

So why do we keep talking about it? Low rates can equate to saving money, and rising prices can equal growing wealth. That’s music to the ears of homeowners and home buyers far and wide.

How much have values risen? The map below will show you home price growth in the last quarter of 2015. Annual growth is detailed in the chart. Pretty impressive, isn’t it?

2015 Q4 Update on Housing Market by State Wisconsin California and Tennessee

The appreciation figures shown are derived from the Federal Housing Finance Agency (FHFA) All Transactions Data and compiled by Estate of Mind, Inc. Appreciation will vary from year to year, can decline and, for any individual property, can be more or less than the averages illustrated here. Information is deemed accurate but not warranted.

While the message of rising values and low rates may sound like a broken record, it’s one we’re happy to repeat.

Why? There may still be opportunities for owners to save or even free up some cash for other needs. With rates where they are, affordability is still good for prospective borrowers, too.

Still, we don’t know how long the current trends will last. If it’s time for you or someone you know to take the first step toward buying or refinancing, we’re ready to help.

Just be sure to take action before the music stops. Contact me today.

Is your home equity locked?

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Conventional wisdom, especially here in Wisconsin, would usually suggest that debt is bad. Mortgage debt, especially, can feel like a heavy, long-term burden. That’s why many see owning a home “free and clear” as a worthy objective.

The problem with conventional thinking is that it usually leads to conventional results. Many “conventional” thinkers are far from achieving their most desired financial goals.

Here’s a new way to think about mortgage debt: Having some equity in your home is a good thing, but having a lot of equity may not be.

Why?

Because to access the cash you’ve invested in your home, you have only two options—to sell or borrow.

When you have no choice but to sell, you are at the mercy of the market and can’t look for opportune timing.

Similarly, borrowing at a point of need may be prohibitively expensive or even impossible.

You can avoid a potential lockout, forced sale or expensive loan by putting funds into safe and liquid accounts instead. You also can maintain an equity credit line against your property before it’s needed. Either choice can move you away from conventional thinking and into smart management.

Contact me today if you would like to talk about managing your home’s equity.