04
Oct
By First Rate Financial Group
Mortgage

How Your Home Equity Can Help You Reach Your Retirement Goals

How Your Home Equity Can Help You Reach Your Retirement GoalsIf you plan on retiring soon, you are probably looking at a few options that can get you over the hump. You are probably excited to start a new phase of life. With a record number of people closing in on their retirement age, many are starting to assess their resources to make sure they have enough money to last them for the rest of their lives. If you already own a home, you might be able to tap into your home equity to help you fuel your retirement.

Your Home Has Probably Gone Up In Value

Your house is an investment and now is your opportunity to capitalize on that investment. There is a great chance that the value of your home has significantly increased since you first bought it. Furthermore, if you have been in your house for a long time, your mortgage may have been completely paid off. This means that just about all of your home’s value could be yours to keep. Your house could be worth hundreds of thousands of dollars, which you can put towards your retirement.

How To Use Your Home Equity For Your Retirement

Of course, you still need a place to live, but there are ways for you to tap into your home equity for your retirement. If you have children who have already moved out, you might be ready to downsize. As a result, you could sell your house and use the cash from the sale of your house to purchase a smaller home. Then, you can use the money left over to fund your retirement. It might not be enough to cover your retirement completely, but it could be enough to get you over the hump if you are wondering when you can retire.

Consider The Implications Of Selling Your Home

When you sell your home, there is a chance that you may have to pay taxes on the capital gains stemming from the value of your home. On the other hand, you might be able to shield some of those gains if you use the money to buy another house quickly. You should reach out to a professional who can help you understand the tax implications of selling your home.

 

03
Oct
By First Rate Financial Group
Market Outlook, Mortgage

What’s Ahead For Mortgage Rates This Week – October 3, 2022

What's Ahead For Mortgage Rates This Week - October 3, 2022Last week’s economic news included readings on home prices, pending home sales, and inflation. The University of Michigan released its monthly reading on consumer sentiment and weekly readings on mortgage rates and jobless claims were also published.

S&P Case-Shiller Home Price Indices: Home Price Growth Slower in July

According to S&P Case-Shiller’s national reading for July home prices, home price growth slowed by -2.90 percent in July as compared to +3.00 percent growth in June. This reading supported analysts’ expectations of a cooling housing market after months of rapidly rising home prices in many areas.  The S&P Case-Shiller 20-City Home Price Index, which is a benchmark report used by real estate professionals, also posted slower home price gains for July. All 20 cities reported slower home price gains year-over-year in July.

The top three cities in the 20-city index for July with Tampa, Florida posting a year-over-year home price gain of 31.80 percent; Miami, Florida followed closely with a year-over-year home price gain of 31.70 percent and Dallas, Texas reported a year-over-year home price gain of 24.70 percent.

Mortgage rates approached seven percent last week and increased affordability concerns for would-be home buyers. Pending home sales declined by 2.00 percent in August; Analysts expected pending sales to decrease by 1.40 percent.

Mortgage Rates Rise, Jobless Claims Fall

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by 41 basis points to 6.70 percent; the average rate for 15-year fixed-rate mortgages rose by 52 basis points to 5.96 percent. Rates for 5/1 adjustable rate mortgages rose by 33 basis points and averaged 5.30 percent. Discount points

for 30-year fixed-rate mortgages averaged 0.90 percent; discount points for 15-year fixed-rate mortgages averaged 1.30 percent and points for 5/1 adjustable rate mortgages averaged 0.40 percent.

Initial jobless claims fell to 193,000 claims filed as compared to the previous week’s reading of 209,000 first-time claims filed. Analysts predicted a reading of 215,000 initial jobless claims filed.

The University of Michigan’s Consumer Sentiment Index for August reported an index reading of 58.60 as compared to the expected reading of 59.50 and July’s index reading of 59.50. Decreased consumer sentiment is  related to high inflation and rising rates for mortgages and consumer credit.

What’s Ahead

This week’s scheduled economic reports include readings on construction spending, public and private sector job reports, and the national unemployment rate. Weekly readings on mortgage rates and jobless claims will also be released.

 

27
Sep
By First Rate Financial Group
Mortgage

How Can You Invest in Real Estate?

How Can You Invest in Real Estate?Many people believe that investing in real estate is something reserved only for the super-wealthy. In reality, this is not the case. Investing in real estate is a smart idea because property can generate a consistent cash stream while providing significant capital appreciation combined with tax breaks. There are multiple ways to invest in real estate, and no single path is better than the others.

Consider Real Estate Investment Trusts (REITs)

A real estate investment trust is a low-cost alternative to buying an entire property. Usually shortened to REIT, this is a company that allows investors to pool their money together before the company purchases multiple properties. REITs bring in money by renting, leasing, or selling the properties they own. Instead of individual investors having to purchase properties on their own, they can pool their money with other investors, reducing the barrier to real estate investing. 

Rent Out Residential Properties

When people think about real estate investing, this is usually the first thing that comes to mind. You can purchase a residential property and rent it out to people. This generates recurring income that can cover overhead expenses tied to the house, such as the mortgage. Then, as the property goes up in value, you build wealth. You can decide to rent the property out for short-term stays, which is a popular option with a vacation home on the lake or the beach. Or, you can have long-term renters if you want more income security.

Think About Flipping Houses

If you have ever watched a TV show about houses, you have probably run into flippers. This is the practice of purchasing a distressed property, fixing it up, and then selling it for a significant profit. If done correctly, you can make a lot of money with a much shorter time horizon; however, this requires a lot more time and effort, as you will need to coordinate a lot of contractors to fix the property and list it in a reasonable time frame. 

Consider Investing in Real Estate

These are just a few of the many ways you can invest in real estate. Think about the benefits and drawbacks of each option, and decide which is best for you.