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Refinancing, the Right Move?

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The federal reserve recently raised interest rates, and if you have an Adjustable Rate Mortgage (ARM), it may be a good time to consider refinancing your home. There’s no one-size-fits-all answer to whether your should refinance, so here are a few of the main considerations.

How long does your introductory rate last?
Most ARMs have a fixed rate for the beginning of the mortgage. This is an introductory period (usually 3-10 years) when your rate will remain constant before it can be adjusted. If you have several years left in your introductory period, you can monitor interest rates for a while before making a decision. But if the intro rate is ending soon, it’s a great time to explore refinancing at a fixed rate.

How long are you staying?
If you plan to sell your home soon—especially if you’re still on a fixed introductory rate—there’s not much motivation to refinance. But if you’ll be at your home indefinitely, you should consider your refinancing options. You could eliminate the stress of not knowing what your future mortgage rate and payments will be.

What’s your loan balance?
The change in your mortgage payment will of course be determined in part by your remaining balance. If you owe $100,000-$200,000, a new interest rate may not greatly affect your monthly payment. On the other hand, if you owe $500,000, a change in interest rate could lead to a much higher payment.

Other factors
The previous items are just a few of the factors that should go into a decision about refinancing. Changes in income and your current credit score should also be considered, so be sure to weigh your options and make an educated decision.

 

Five Tips for First-Time Buyers

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No matter how much time you spend on researching and educating yourself about your home purchase, it’s hard to cover every detail. Here are a few tips for avoiding rookie mistakes with your first home purchase.

  1. Save as early as you can: Even if you think you’re years away from buying your first home, try to start saving for your down payment. It makes a huge difference in your monthly payments, and helps avoid paying Private Mortgage Insurance.
  2. Be thorough with mortgage shopping: There are countless resources out there that can help you get the best terms for your mortgage. It may seem like a lot of work to shave less than a point off your mortgage rate, but it’ll save you thousands in the long run.
  3. Consult a skeptic: You’re likely to fall in love with a home, and that can make it difficult to take problems seriously. Bring along a skeptical friend or family member who can give you an honest opinion.
  4. Be patient with getting settled: You’ll be anxious to make your new home your own, but take some time to see how your budget truly shakes out. In other words, hold off on big furniture purchases and remodeling projects.
  5. Make sure you’re happy with the neighborhood: The house may be perfect, but don’t discount the surroundings. You don’t want to end up in the suburbs if you’re going to miss walking to your favorite coffee shop, and you don’t want to settle for the city if you’re looking forward to some peace and quiet.

 

Don’t Forget About Homeowner Tax Breaks!

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A New Year means tax season is right around the corner. One of the many perks of homeownership is big tax breaks. So whether you’re doing your taxes yourself or getting help from a professional, it’s important to take advantage of those breaks!

Mortgage Interest Deduction: Before buying a home, a standard deduction may have made the most sense when you prepared your taxes. But homeowners can deduct the interest portion of their mortgage payments, and the earlier you are in your mortgage, the greater the percentage of each payment that goes toward interest, so take advantage right away!

Home Office: There are specific criteria that have to be met in order to deduct home office expenses, but it can lead to a very large deduction. In general, your home office has to be used specifically for business purposes. Check with a tax professional to see if your home office qualifies for a deduction—it’s a little extra work, but can make a big difference in your tax responsibility.

 

Oregon Fuel Prices vs. the Cost of Bottled Water

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The consistent drop in fuel prices since late last summer 2014 hasn’t gone unnoticed by anyone, and for those of us in the great northwest there is no exception. Watching the prices dip just under $2.00 a gallon in some spots has left us smug with that feeling of savings and frugality as we drive away from the pump, the high costs of the past summer just a memory by now. For the first time since 2009 the cost of a gallon of gas is cheaper than that of a bottle of water (a gallon of store-bought water averaged $2.20/gallon versus $1.68/gallon for gas)! No, we are not suggesting that you switch up your beverage of choice, let’s just take a  quick look at the numbers:

Average cost of 1 gallon of gas in the United States – $2.07/gallon
Average cost of 1 gallon of gas in Oregon – in many places less than $2.00/gallon
Average cost of 1 gallon of water in the United States – $1.79/gallon

What does this mean? This means that there has been an increase in both domestic and OPEC production. “Any time you’re able to compare gas prices to water, it’s a very unique situation,” said Allison Mac, a petroleum analyst for GasBuddy.com. Granted, there are many different grades and qualities of bottled water, many of the imported ones are over $4.00/gallon. So we must also consider the marketing psychology of bottled water, where consumers decide what the buy based also on packaging, labels, colors, perceived benefit of drinking a certain brand and so many others.

“Even factoring in production costs (including gasoline to transport the product), Fisher added, ‘the actual cost of bottled water is half the retail cost – there’s at least a 100 percent markup.’ And what’s the relative value to consumers? A gallon of gasoline can move a 2,000-pound car 40 miles, Fisher said. A gallon of water might not keep a 150-pound human going for the same distance. ‘Think about the amount of work necessary to produce a gallon of gasoline – bringing up that black sludge, refining it, shipping it in crazy huge quantities — and the mount of economic value packed into a gallon,’ Fisher said. ‘It’s much higher than the work required or the economic value of a gallon of bottle water,’ he said.” – Oregon Live

With spring and summer around the corner gas prices should start to inch upwards as people begin traveling more and oil companies switch over to a different blend. The good news, experts say, is that gas is barely expected to touch $3.00/gallon at its high point this year. What does this mean for you? It means now it the time to explore, take that road trip you’ve been thinking about or move to the country now that you can afford that extra commute! For the full article please visit Oregon Live

Source: Oregon Live