DOES IT MAKE SENSE TO REFINANCE?

DOES IT MAKE SENSE TO REFINANCE?

Historically low mortgage interest rates have prompted many homeowners to think seriously about refinancing, but there’s a lot you need to consider before filling out a loan application. Start by determining why you want to refinance. Is it primarily to reduce your monthly payments? Do you want to shorten your loan term so that you can save interest and possibly pay off your mortgage earlier? Are you interested in refinancing from one type of mortgage to another (e.g., from an adjustable rate mortgage to a fixed-rate mortgage)? Establishing a goal will help you determine if refinancing makes sense for you and which type of loan will best suit your needs. Keep in mind that the low mortgage rates that are advertised aren’t available to everyone. To get the best rate, you’ll need to meet the lender’s criteria. For example, you generally need to have an excellent credit score, stable income, and substantial equity in your home–e.g., 20% or more. The type and length of the loan will also affect the rate you receive–in general, the shorter the loan term, the lower the rate. Advertised mortgage rates sometimes also include points that you’ll have to pay to obtain the lower rate–each point is equal to 1% of the mortgage amount. Because so much can affect the rate you receive, it’s important to shop around and compare interest rates, loan terms, and costs to make sure you’re getting the best deal. Finally, you’ll need to consider refinancing costs as well as the new interest rate you’ll receive. Refinancing costs may include points, closing costs, and private mortgage insurance premiums (if any)...
FINANCIAL CONSIDERATIONS FOR 2013

FINANCIAL CONSIDERATIONS FOR 2013

We are now in plain view of the “fiscal cliff”. After the election, Congress may or may not end up keeping income and estate tax rates at their recent levels. Next year may bring some notable financial developments, and it isn’t too soon for households to think about them. You may want to prioritize tax reduction If the Bush-era tax cuts sunset, everyone will see higher taxes. The federal income tax brackets (10%, 15%, 25%, 28%, 33%, 35%) that we have known for the last nine years would be replaced by five higher ones (15%, 28%, 31%, 36%, 39.6%) come 2013. 1 You may have less take-home pay next year Social Security taxes for paycheck employees are slated to return to the 6.2% level in 2013. They’ve been at 4.2% since the start of 2011. If you earn $75,000 during 2013, you will take home about $1,500 less of it than you would have in 2012. If you earn $50,000, we’re talking $1,000 less. 2 High earners may want to watch their incomes If your earned income for 2013 tops $200,000 – or exceeds $250,000, in the case of a couple – you may face two Medicare surtaxes. While the Medicare payroll tax on earned incomes above these levels is set to rise to 2.35% from the current 1.45%, the second surtax may prove to be the real annoyance: there is scheduled to be a 3.8% charge on net investment income for individuals and couples whose modified adjusted gross incomes surpass these levels.1,2 Some fine points about this second surtax must be mentioned. It would actually be levied on...
ANNUAL FINANCIAL TO-DO LIST 2013

ANNUAL FINANCIAL TO-DO LIST 2013

ARE YOUR DUCKS IN A ROW FOR 2013?   YOUR ANNUAL FINANCIAL TO-DO LIST Things you can do before and for 2013. What financial, business or life priorities do you need to address for 2013? Now is a good time to think about the investing, saving or budgeting methods you could employ toward specific objectives. Some year-end financial moves may prove crucial to the pursuit of those goals as well. What can you do to lower your 2012 taxes? Before the year fades away, you have plenty of options. Here are a few that may prove convenient: *Make a charitable gift before New Year’s Day. You can claim the deduction on your 2012 return, provided you use Schedule A. The paper trail is important here. If you give cash, you need to document it. Even small contributions need to be demonstrated by a bank record, payroll deduction record, credit card statement, or written communication from the charity with the date and amount. Incidentally, the IRS does not equate a pledge with a donation. If you pledge $2,000 to a charity in December but only end up gifting $500 before 2012 ends, you can only deduct $500.1 Are you gifting appreciated securities? If you have owned them for more than a year, you will be in line to take a deduction for 100% of their fair market value and avoid capital gains tax that would have resulted from simply selling the stock, fund or bond and then donating those proceeds. (Of course, if your investment is a loser, then it might be better to sell it and donate the money so you can claim...
MY REASONS FOR LIFE INSURANCE

MY REASONS FOR LIFE INSURANCE

IT’S SO MUCH MORE THAN JUST MONEY WHEN YOU DIE From my experience over the past 12 years, I’ve seen all sorts of reasons for not having life insurance. I’m healthy, I don’t need it. It’s too expensive. My family would help out. I’ll get it when I’m older.  Even worse, is those that say, I’ve been meaning to do that. Or, I’m pretty sure I have some at work. The truth is, that if you have family that relies on you to provide for them, life insurance is an absolute must. It protects your loved ones if the worst happened, and you weren’t  around tomorrow. It’s important. Important enough to take some time to make sure that you’re properly covered. It’s important because it can provide your family with a tool that gives them the freedom to deal with the loss of a spouse, a Mom, or a Dad.  It’s a tool that allows them to take extra time off work, seek counseling, go on vacation to get away for a while, or just the peace of mind of not having to worry about paying bills.  It’s so much more than just money you get when you die. A while back, a pretty amazing person that I know, went through a sudden loss of a spouse. She wrote the letter below to express her feelings and hoped that it might make an impact on at least one family, on the real value of planning and insurance. I am a new widow.  I am a young widow.  The love of my life, my wonderful husband, Martin, died suddenly on February 15, 2011.  He...
JANUARY’S ALMOST OVER

JANUARY’S ALMOST OVER

WHAT NEXT STEPS DO YOU STILL NEED TO TAKE? January seems to be a time of year for reflection and goal setting. Unfortunately, if you’re anything like me, it all too often stops there. I don’t know how many times I’ve drawn up a diet & exercise plan or created a daily routine that I would stick with – only to see it fade out of my life by the end of January. Over the years in my planning practice, I see this with many family’s finances as well. Below is are 4 potential areas that you may have set some goals, but haven’t quite followed through on. I’ve also provided one quick actionable idea for each area for a bit of motivation to help you take your next step. 1) Future Goal Setting Is this going to be the year that you start planning out retirement? It can be overwhelming and may seem like it’s too far away to worry about. Pensions. Social Security. 401k’s, IRA’s, 403b’s. Am I saving enough? Will my money last? Because it can seem so complicaticated, this leads to what many of us end up doing the worst – NOTHING. QUICK TIP – Start with writing down some goals in 3 areas. What age do you want to retire? How much would you like to have on a monthly basis?  When will the house paid off? If you can set an initial goal for each of these areas that’s a great start. Then through working with an advisor or online tools, you can start backing into what you’ll need to do to reach each...