Should You Finish Paying Off Your Mortgage Before Retirement?

Own a home equals comfy retirement... In theory, you buy a house when you are 30ish, faithfully make the payments for 30 years and at age 60 you own your house, free and clear.

But more often than not, here's what happens. You go from a starter home to a bigger house, with a larger mortgage. You refinance to lower rate and/ or take some cash out in the process. And at age 60 you're still paying a mortgage 😕

 

According to the Federal Reserve Board, over one third of homeowners ages 65 to 74 are still burdened with monthly mortgage payments. The average balances for those mortgages are $118,000 and some might have that amount or more in a retirment plan. The question, is it worth it to draw on your retirement, and perhaps other investments, to pay off that mortgage? That depends on your individual situation. Here's an idea on how to decide whether to pay off your mortgage before retireing:

When to Keep Your Mortgage:

You don't have enough money. If paying off the mortgage will make you cash poor and unable to cover your bills, then don't do it. Debt wise, your mortgage is about the best loan you can have.

The money is tied up in other investments. Even if you do have the financial resources to pay off your mortgage, it doesn't make sense if the money is already invested in assets that generate income and appreciate.

You have other debt. A mortgage carries a lower interest rate than most other loans. So if you're carrying credit card debt or have other high interest debt, pay that off first.

When to Pay Off Your Mortgage:

You have a cash surplus. If you have extra money sitting in a money market or low interest bank account, it makes sense to use it to payoff a higher interest rate mortgage. No mortgage means your monthly bills are lower too.

You have access to a home equity loan. You don't need a lot of cash on hand, if you have access to  money if you need it for a major expense, such as a medical bill or home improvement. You also have a backup option, later on, of taking out a reverse mortgage which Rockland Financial could help with if need be.

You're looking for peace of mind. Paying off your mortgage is like making a risk-free investment, with no management fees. Knowing your house is paid off free and clear could help you sleep better. However, as a homeowner you still pay real estate taxes, insurance, utilities and maintenance. But you can delay repairing a cracked window or chipping paint a lot easier than you can put off a bank.

You want to set up a comfortable nest egg. A house is a large asset. It's yours to live in, share or leave to your children. If you decide to downsize, then that profit from the sale of your house goes to you and not the bank or the government, thanks to favorable tax treatment of capital gains from a primary residence.

*Source- US News & World Report/ Yahoo.com 

Rockland Financial is your one stop Real Estate source.

Refinancing or buying a home, we will get you the best mortgage financing available.

Looking to sell your home, we will list and market your home to ensure the highest price possible.

Looking to buy a home, we will help you find the home your looking for that best fits your needs.

Whatever it is we can help, contact us anytime. 

Juan-Diego Currea - Broker

 

4 Signs Now’s the Right Time to Sell Your Home

Time to sell your house? Have you been on the fence, well then here is some good news: It’s a great market for sellers! The limited inventory continues to drive home prices up, and the latest data from the National Association of Realtors shows that 50% of recently sold properties were on the market for just 39 days!

Of course, market conditions shouldn't be the only determining factor for a home sale. You have to take your personal situation into account...

Here are a few other things to keep in mind before planting a For Sale sign in your front yard.

You’re Out of Debt With Cash in the Bank

Be money-smart and start by taking a good hard look at your finances. If you’ve paid off all your non-mortgage debt and have 3 to 6 months of expenses in reserves, that’s a great sign you’re financially stable enough to purchase a home again. Rockland Financial can help you list your home for sale and with your new house hunt as well as getting your pre-approved for your financing. We will help you A to Z...

Got Equity on Your Side?

The times when people owe more on their homes than what they are worth are in the rear view. When the housing bubble burst, home values plummeted, thankfully, the tide has turned.  According to CoreLogic, only 8% of homes with a mortgage had negative equity at the beginning of 2016, a great stat. If you’re not sure where your equity stands, ask an experienced real estate agent ME again, to run a free comparative market analysis (CMA) to determine an approximate value for your home.

It could be worth selling, if your home has recovered enough value to provide at least 20% equity for your next purchase. 20% a magic number? Maybe, because putting 20% or more down on a home keeps private mortgage insurance (PMI) out of the picture. That could save you hundreds even thousands of dollars each year!

Your Home No Longer Fits Your Lifestyle

Another factor to consider is how well your home meets your everyday needs. Perhaps you could use another bedroom or two or even three to accommodate your growing family. Or maybe kids are gone  and downsizing is the goal.

Empty nesters can really benefit from selling now. It can feel very liberating to sell a large home, pay cash for a smaller one, and invest the rest in your retirement.

Whether you’re sizing up or down, make sure your mortgage fits your budget.We can help you calculate and figure out the best scenario for your current situation.

You Can Afford the Move

Don’t think too far ahead, remember about some of the expenses you may need to account for in making a move. Hiring movers? Save up cash to cover the cost of packing up and hauling your stuff away.

Give your house a little TLC before listing it for sale:

• Paint: Paint is probably the number-one investment when upgrading. Buyers love a fresh coat of paint

• Curb appeal: You only get one chance to make a first impression. Plant flowers, trim shrubs, and paint the trim. Inexpensive ways to get the most bang for your buck

• Kitchen and bath: You probably don’t need to invest in expensive appliances or countertops, but new faucets and fixtures could go a long way.

*This won't cost you a penny, Clear out the clutter. Neat closets and tidy shelves make your home look larger and cleaner.

Make the Right Choice for You

There is no magic formula for determining the right time to sell your home. Partner with a pro you can trust (ME) to provide honest advice so you can do what’s best for you and your budget. I always put service and my clients best interest before sales or loans—but if it's the right time, rest assured, I will get it done.

We will help you List
We will help you Buy
We will get you the best loan to meet your financial conditions.

Does it cost more to own than to rent, Yes... BUT

Owning a home is often considered the American dream and it's an expensive one. Homeowners in all states and Washington, D.C., can pay anywhere from 33% to 93% more for housing each month than do renters living in the same state.

The upside? Many homeowners reap benefits that renters cannot, such as financial security and stability, tax deductions and a sort of forced retirement savings. Every time you make a mortgage payment, you get closer to fully owning the home. The equity you build can be collateral for loans like cash-out refinances, home equity loans and lines of credit that can be used to improve the home, boost its value or be used to consolidate debts and in financial emergencies.
  

While renting can't offer those long-term financial benefits, it is cheaper to rent on a month-to-month basis obviously. If you're considering buying, before entering the market, contact Rockland Financial  to estimate the costs and compare mortgage rates so that we can find you the best deal.

Let us help you determine where you stand and provide you with a financial analysis that will assist you in determining your best course of action.

Key takeaway

• Owning is more expensive everywhere. Across all 50 states and Washington, D.C., it costs more each month to own a home than to rent. However the benefits are there and if it is in your financial resources to be a homeowner, there is no time like the present.   
  

Mortgage Rates Steady to Slightly Lower

Mortgage rates managed to maintain or increase the improvement since Wednesday's 3/15/2017 Fed announcement.  While the Fed did indeed hike the rate, the hike was widely expected and anticipated and had already been accounted for in the bond markets (like those that dictate mortgage rates).  The easiest way to understand this is to consider that most bond market securities can move/change every millisecond of every business day.

The Fed Funds rates, on the other hand, only changes/moves at the end of scheduled Fed meetings eight times per year.  If bond markets are reasonably confident the Fed will be hiking or decreasing interest rates, they can begin trading accordingly well in advance and thus build that into the rates we see before it is even officially announced.  That exact scenario played out over the past month and accounts for much of the move higher in rates from late February through Fed day.

Because bonds were already in position for the Fed hike meaning they had already anticipated the outcome, they were free to react to other aspects of the Fed policy.  Specifically, investors were expecting the Fed's forecast to show faster rate hikes in the future.  This accounts for some of the move higher in rates in early March.  The Fed's actual forecast turned out to be fairly tame and rates were thus able to move quickly lower.

There hasn't been much movement since the initial reaction to the Fed this past Wednesday. Conventional 30yr fixed rates continue hovering around 4.25% for top tier scenarios. 

Let us help you list your home for sale or allow us to guide you through your house hunt and purchase, Rockland Financial can help you A to Z...

Selling your home or looking to buy???

This Basically means it's backed by science... 

These people have great real estate humor (see pic below) and I am happy to share it with you. As you can see not calling me to find your dream home would be a big mistake, it's right there in black and white... actually in blue and whatever those other two colors are but you get the point. 

In this world of the internet I realize the general public is all about DIY everything including finding or selling their homes but this is one area where it rarely makes sense to do so. 

If you try and sell your home on your own, yes you will save that part of the commission 2-3% but often times your final sale price may end up being as much as 10% lower than if you went with a seasoned vet. So although it may feel as though you saved a few bucks at the beginning you actually end up with a smaller net profit. 

Selling a home is a large proposition and ideally you want to get the best money you can as quickly as possible. You probably are not an expert on real estate and 2 months spent online researching real estate is not a replacement for a good realtor who knows the business, the local market and the process.  *Market research, market analysis *Tips on making your home more attractive to potential buyers *Showing your home for you and fielding all inquiries *Presenting offers to you as they come in -- these are things Rockland Financial will help with and more. In essence I remove any of this burden from you, with the exception of keeping your house clean =) 

With your mortgage needs or real estate needs and very often for both, give us a shout.

Plus people love us on Yelp!   

Contact us we can help www.rocklandfin.com

*lighter side of real estate pic

General Loan Limits for 2017

The general loan limits for 2017 have increased and apply to loans delivered to Fannie Mae aka new lender in 2017 (even if originated prior to 1/1/2017). This is the first time the base loan limits have increased since 2006. 

 

What does this mean to you, well many consumers were on the bubble for a long time. By that I mean being in a position where they needed to obtain a high balance loan and along with that a higher rate because the loan amount they were applying for was above the conforming limit. Now with the higher limits, many more borrowers will be in a position to obtain the lower priced conforming loans.

 

Let us help you determine your possibilities.

 

General Loan Limits for 2017

Maximum Original Principal Balance for 2017

Units	Contiguous States, District of Columbia, and Puerto Rico	Alaska, Guam, Hawaii, and the U.S. Virgin Islands
1	$424,100	$636,150
2	$543,000	$814,500
3	$656,350	$984,525
4	$815,650	$1,223,475

Maximum Loan Limits for High-Cost Areas for Mortgages Acquired in Calendar Year 2017
All but 87 counties (or county equivalents) will see a loan limit increase.

Units	Contiguous States, District of Columbia+	Alaska, Guam, Hawaii, and the U.S. Virgin Islands
1	$636,150	$954,225
2	$814,500	$1,221,750
3	$984,525	$1,476,775
4	$1,223,475	$1,835,200

*source Fannie Mae

Mortgages Rates Uncertainty Remain HIGH

Hello again from Rockland Financial...

Rates have been edging higher recently, nothing drastic but they seem to be trending that way.

Interest rates didn't move much today, with most lenders just a bit higher than yesterday.  This actually keeps us in line with the highest levels in over 4 months.  However, for the sake of perspective, rates have almost never been as LOW as they are today.  The average lender is quoting conventional 30yr fixed rates of 3.625% on top tier borrowers, with a few at around 3.5%.

Bond markets that affect rate movement find themselves generally defensive and uncertain. Investors are anxious to see if next week's Fed announcement will hold clues about the Fed's intention to hike rates in early December.  Although the Federal Funds Rate doesn't directly affect mortgage rates, if investors think the Fed will hike in the near future, mortgage rates tend to move higher in the present. A bit of a knee jerk effect so to speak

That's one of the key reasons that rates have been seeing an uptick over the past few months.  The other major concern is that of the Fed's largest counterpart, the European Central Bank (ECB). Investors are anxious to find out if the ECB plans to begin reducing the amount of bonds it's buying each month.  This bond buying is a driving force and contributes largely to low rates around the world.  There are obviously rumors floating around on both sides of this debate, but we won't know anything for sure until early December we should hear ECB's thoughts.

There's a massive amount of uncertainty between the ECB and Fed, and this can't possibly be cleared up for more than a month. As far as strategy is concerned regadring mortgage rates, it makes more sense to be defensive (as in favoring locking vs floating) until at least and unless rates can stage a big enough comeback to call the recent uptrend into question.

And now the broken record part. Rates are still historically low and there are many reasons to take advantage and refinance, below are just a few.

If you are in the market to purchase, getting pre-approved is paramount.

Contact us to help you with any Real Estate need you have. (Rockland Financial is also now representing buyers and sellers with finding the perfect home or listing your property to get the highest price available)