Adjustable Rate MortgagesRate shoppers naturally gravitate toward the lowest quotes, but a lower rate can lead to financial trouble if you donbt understand your loan terms. Itbs important to know the relationship between rates and fixed terms so you can determine when itbs appropriate to use a shorter loan term instead of a longer one.Why Are Rates Higher For Longer-Term Loans?
A 30-year fixed mortgage rate is higher than a five-year adjustable rate mortgage (ARM) rate because a financial institution is taking more risk to lend you the money for a longer period of time.The reason for this goes to the root concept of how banks operate. A bankbs business model is to ensure that interest they collect on loans exceeds interest they must pay out on deposits.Interest that banks must pay you on deposits rises as the economy expands, and falls as the economy contracts over time. Itbs easier for banks to manage this interest rate risk in the short term.
For example, interest rates paid on checking and savings deposits are very low because youbre free to withdraw your money at any time, while rates paid on certificate of deposit (CD) accounts are slightly higher because the bank requires you to keep those funds deposited for periods of one month to five years. Because banks know their expenses on deposits for up to five years, they know how to price mortgage loans up to five years.
Peg Your Loan Term To The Expected Time You
Are In The Loan
Itbs a lot of risk, and raises the question. How do you choose the right balance between the lowest rate and longest fixed term? The answer is simple: Make sure your rate is fixed for as long as you expect to be in the home or in the loan.
If you know youbll sell the home or pay off the loan in five years, a five-year ARM is appropriate. Other ARMs you can get have initial fixed periods of 3, 7 and 10 years, and rates may rise as the terms lengthen. If you know youbll be in the home or the loan longer than 10 years, then your safest budget move is to choose a 15-year fixed or 30-year fixed loan.
7 Good Reasons For A Mortgage Refinance
Why refinance? There are at least seven reasons to refinance a mortgage. You probably can think of the first one — to get a lower mortgage rate. Lenders today are offering low rates, making a refinance a no-brainer for many. But low rates are not the only motive for refinancing a home loan nowadays. The following are good reasons to consider a new home loan.
Refinance For A Lower Rate
Get A Mortgage On A Paid-Off House
Cash Out To Consolidate Debt
Cash Out To Buy Other Property
Address Family Matters
Consolidate Two Mortgages
Convert An ARM
Out With The Old, In With The New
Because the majority of home shoppers now start their search for a new home multiple times a day, listings can become old news fast. As a home seller, your biggest competition is a surge in new homes for sale, pushing yours lower in search results. The largest surge nationally occurs in the last weeks of February and into early March, so if you list your home before then you may quickly become outranked. Listing your home in early April, however, means youbll likely bypass this surge.
When youbre looking to sell, you donbt want to attract people who are just looking. You want someone whobs serious about buying. How do you know if a buyer is serious? One way is to see if theybve contacted a real estate agent or mortgage broker, signaling theybre ready to take the next step in the home buying process. Data shows agent and lender contacts build in early April, so this is a good time to put your home on the market if you want to attract serious buyers. Time is money! In addition to attracting a serious buyer, you likely care about two things: how much you sell your home for and how quickly. Turns out, the two go hand-in-hand.
After Jan. 1, the first significant drop in the time listings typically spend on the market is in early April. This is also when the difference between final sale prices and list prices is highest.
Use The Proceeds For These 8 Upgrades
Updating your home with a few design features can enable you to live there longer independently. The cost of the changes can range from a couple of hundred dollars for a comfort-height toilet to more than $100,000 for a downstairs master suite addition. You can even make some simple changes now by adding a few grab bars in the bathroom or some task lighting in the kitchen. While safety is one of the key principles in design, you donbt have to sacrifice style or make your home resemble a hospital.
1. Replacing door knobs with levers can help with ease of entry.
2. Consider widening doorways to 36b or more to accommodate a
wheelchair if needed. A hallway should be at least 42b wide for
3. Choosing the right flooring, removing any stumbling blocks
between rooms with different types of floors.
4. The joy of cooking can turn into a muscle-aching chore for older
homeowners whose kitchen design fails.
5. Installing a single-lever faucet. Having one lever makes it less
likely that youbll accidentally scald yourself by turning on the hot
water and forgetting to temper it with the cold.
6. Adding or remodeling to a first-floor master suite in your existing
home might be costly but necessary.
7. Rocker light switches that you gently push instead of flip are a
lot easier on arthritic hands.
8. Automatic motion-sensor lights can make a big difference when
youbre going to the bathroom in the dark.
From lift chairs to adjustable beds, youbll find all kinds of special furniture products marketed to seniors. But stylish, conventional furnishings can also provide comfort and accessibility if you look for the right features, such as built-in lumbar support in upholstered pieces. As you age, you probably wonbt relish hoisting yourself in and out of a high bed any more than you would like climbing stairs to get to it. While they donbt necessarily go for the ultra-modern platform beds, many are choosing models that are fairly low to the ground. When you get older, having to leap up into bed is not that practical. When home buyers are looking for a place to live out their retirement years, being able to get to their bedroom without climbing stairs is top priority.
6 Uses For Rubber Bands In Your Home!
The humble rubber band can perform more tasks than you think. Found wound around our weekend newspapers or broccoli stems, the rubber band can be put to great use in your home. The next time you have a home improvement project to work on, free the rubber bands from the junk drawer and put them to work!
1. Mark Paint Levels
Whenever you are done with a painting project, itbs a good idea to hold on to the original can for touch-ups. Simply place a rubber band around the approximate paint level.
2. Remove Stripped Screws
Place the flat side of a rubber band over the stripped screw head and place the tip of the screwdriver on top of the rubber band. This will allow you to twist the screw out of place.
3. Prevent Paint Drips
Place a rubber band underneath the can so that part of the band stretches across the can opening. Wipe your brush against the rubber band to remove excess paint.
4. Avoid Wall Scratches When Removing Nails
Criss-cross a rubber band so that the bXb rests on top of the top of the hammer head. The rubber band will protect the wall from hammer marks.
5. Keep Tools From Sliding
With hand tools on a sloped surface, like a roof or driveway, keep them from sliding down by wrapping them with rubber bands.
6. Erase Wall Measurements
Donbt worry if your pencil lacks an eraser. When itbs time to erase pencil markings on a wall, simply use your rubber band like you would an eraser.