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April Journal 2022

Thinking of Refinancing? Some Things to Keep in Mind

Although interest rates are predicted to rise in 2022, the mortgage market has already seen major fluctuations. So, if you're watching the rates with refinancing in mind -- either to lower your payments or tap into your home's equity -- here are some things to consider.

  • A rate/term refinance can lower your loan's rate, change its term, or both. For example, if your income's increased over the past years, you can apply to refinance to a shorter loan term. This provides major savings by lowering your loan's total interest.
  • In addition to shortening your loan's term, if you prefer to keep more of your take-home, you may be able to refinance to a longer term.

Thinking of tapping into your home's equity with a cash-out refinance? Ask me to compare your refinance costs with a home equity line of credit (HELOC). Both are smart options for financing anything from a major remodel to a new vehicle, as they can save you money with their lower interest rates.1


How Low Can You Go with Homeowners' Insurance?

It never hurts to shop around for a better deal...including homeowners' insurance. Even if you "bundled" your homeowners' and auto insurance with one insurer in exchange for a discount, there are other ways to lower your premiums.

  1. Bump up your security. Adding a monitored alarm system, high-tech locks, or a combined fire alarm/sprinkler system can earn you a 5% to 20% discount while providing an extra bonus: additional peace of mind.
  2. Check out lesser-known discounts. If you work as a teacher, firefighter, or engineer, you may qualify for a lower rate. If you don't have any smokers in your household, you may also save.
  3. Get credit for home improvements. If you've recently installed storm shutters, tough roofing, or replaced your plumbing or electrical systems, any or all of these could increase your savings.2


How Rising Rates May Affect This Year's Homebuyers

The Federal Reserve raised interest rates by .25% last month, with more rate hikes to follow. While higher rates contribute to higher prices, they also battle inflation by lowering consumer demand and slowing economic growth (think of rate hikes as bad-tasting but effective medicine).

This inflation-fighting strategy may create a "good news, bad news" scenario for this year's home buyers. While higher rates will push home prices higher, they're also expected to help cool hotter real estate markets and eventually increase inventory. However, it may take some time for this to happen.

Rate hikes won't just affect mortgages. Other types of loans, including consumer credit, may also become more expensive. Since economists are predicting rate hikes up to 2.8% by the end of the year, you may want to plan your winter holiday shopping in advance.3


A Short History of Kit Homes

Beginning in 1908, budget-minded homebuyers ordered "build-it-yourself" homes from catalogs.4 Known as "kit homes", these were sold by retailers like Sears and Aladdin and delivered to local railroad stations. Each kit included nails, hardware, windows, doors, flooring, and pretty much everything else. Many kit homes are still standing and highly desirable: for example, a 1928 Maryland bungalow originally purchased from Sears for $2,039 recently sold for $425,000.5


How Buying with Klarna, Affirm or Afterpay May Improve Your Credit

Buy Now Pay Later (BNPL) plans are massively popular, and for good reason. Instead of paying 100% of an item's price at checkout, consumers may apply for a "Pay in 4" payment plan from companies like Klarna, Affirm and PayPal. These make larger purchases more affordable by splitting the total price into four or more repayments, usually due every two weeks. While most charge interest, some plans are interest-free, with retailers footing the bill for their customers.

Since BNPL plans have contributed to changes in buyer habits, credit bureaus Equifax®, ExperianTM and TransUnion® have begun to monitor their usage.

  • Experian plans a specialty bureau to hold BNPL data. Information from the specialty bureau will be "promoted" periodically into the consumer's core credit file.
  • Equifax plans to add BNPL information to regular credit reports.
  • TransUnion will partition off BNPL data within core credit reports.

This could be good news for BNPL users with lower credit scores who make their payments on time, as this may raise their credit score.6


Colors That Create the Right Mood for Every Room

Thinking of updating your home's paint scheme? While personal and cultural tastes will influence your color choices, consider how they will affect and encourage different moods. It's why red is a popular restaurant color scheme: it actually increases appetite. Research has also found that certain colors are more suitable for different areas of a home, like the ones below:

Entry areas and foyers: Feel free to go bright here with red, orange, or yellow. These are energizing colors, so you can choose intense shades that will make visitors feel truly welcome and family members happy to be home.

Family and living rooms: Go with shades of brown or taupe to encourage a cozy feeling. If this seems too bland, you can add a second neutral color to window frames and other details.

Bedrooms and dens: Since relaxation is the key, blues and greens in natural shades encourage tranquility. If you consider your bedroom your sanctuary, try a medium lavender shade. For a feminine look, soft, light pinks deliver while making a small bedroom appear larger.7


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