You graduated last spring. Spent your summer finding that first job. Planning for retirement doesn’t seem like a very high priority, not compared with getting a handle on your student loan payments, furnishing that new apartment, or making your car payment. Still, a little time spent sifting through your retirement account options will pay real dividends towards your future financial security.
It happened, a job, a good job, a good job with benefits, a good job with retirement benefits. Now what? I think that it is incumbent on each and everyone to contribute as much as they can to their retirement account and it is never too early to start contributing. There are things to consider.
It happens to everyone eventually. You change jobs. The good news is that you were able to take advantage of their 401(k) program. Now as you change where you hang your hat from 9 to 5 you need to make a decision on where you should put your retirement savings.
Refinancing a mortgage loan to get a lower rate has become a sport. Many people think that there is no reason not to refinance and then refinance again. All this activity based is on the concept that the transaction cost to lower the interest rate was zero, zip, nada. Where borrowers are correct is that it is easy to refinance a loan and not have to bring any money to the table. Where they are wrong is that the process is free.
Once you have signed the papers you’re every bit as responsible as the primary loan signer to make payments. To quote from the FTC’s Facts for Consumers guide “Co-signing a Loan“: “When you’re asked to co-sign, you’re being asked to take a risk that a professional lender won’t take. If the borrower met the criteria, the lender wouldn’t require a co-signer.”
Homeowners think there’s some magic to these bi-weekly payments that reduces the interest expense on their loan. The magic is in making the equivalent of 13 monthly mortgage payments per year. I don’t recommend that homeowners switch to a biweekly mortgage. It’s just not worth the bother or expense.
My advice to people who are trying to decide whether to pay off or pay down their mortgage from savings or investments is to consider what they’re earning on their investments after-tax and compare that to what they’re paying after-tax on their mortgage.
If you are a military veteran or are on active duty, a VA loan may be the perfect loan for you. The Veterans Administration provides guaranteed loans, made by VA-approved lenders to eligible military members. The VA guaranty protects the lender not the borrower from loss resulting from the loan not being repaid. The VA loan programs offer many advantages to veterans and can be obtained with little or no down payment with a competitive mortgage rate. Borrowers can choose a fixed or variable rate loan. The loan can be used to purchase a home or refinance an existing loan. The process is different from conventional loans.
To refinance your existing mortgage seems to be an inalienable right. Do not listen to the “experts” that will tell you once the prevailing mortgage rate falls .50 – 1% below the rate on your current mortgage you should refinance. Running off to refinance your mortgage when headlines announce mortgage rates are falling is not the best of ideas.
The US population is aging, and as it does, older Americans want to age in their homes but need to access the equity for home improvement or other bills. Reverse mortgages were created as a way to convert a portion of an owners home equity into cash. While it is similar to a home equity loan, no monthly payment is required until the borrower no longer lives in the home as a primary residence or fails to meets the obligations of the mortgage (i.e. paying taxes). It’s important to know more about reverse mortgages in order to determine it is an option for you.