Mortgage rates have benefitted lately from the situation in Europe, as global investors have sought the safe haven of our US Bonds. However, as the Euro’s freefall is finally showing some signs of stabilization, traders and investors may begin to sell their US investments and move their money back into the European markets. This could reverse the trend and cause home loan rates to move higher. With that in mind, it is time to consider whether you should be making any changes to your mortgage plan.

Confused about rates? Call 801-501-7950

Should I Consider a Refinance?
Given the current state of the market, if you have a 30 year fixed rate that is higher than 5%, or a 15 year rate greater than 4.5%, there is a high probability that you can improve the cost of your home loan. Also, if you have an adjustable interest rate of any kind, it is worth considering securing a fixed rate to eliminate your interest rate exposure. With mortgage rates at historic lows, there is only room for significant changes in one direction: up.

What are the Fees to Refinance?
In most cases, the type of mortgage that I suggest to my clients considering a refinance is one that does not have fees that are charged to the homeowner. Rather than paying the fees associated with a mortgage, or adding the cost of the home loan into your principal balance, a no-fee loan has a slightly higher interest rate. This is ideal for homeowners who are not certain they will be in their home long term, or for borrowers who are likely to refinance their home again in the next 10-12 years. If the plan is to keep the home and the mortgage for at least 12 years, then I may suggest paying fees to achieve the lower rate. As part of our mortgage review process, we evaluate the options and determine which is most appropriate for our clients. A mortgage is a very personal decision. If your mortgage advisor does not fully understand your long term goals, he or she is not able to ensure the best loan strategy that will help you accomplish your plans.

What is the First Step?
My team offers a free mortgage analysis. The process begins with a fifteen minute phone call where we gather the information needed to prepare our recommendations. In many cases, we find people who are already in the best mortgage strategy available. If that is the case, we will put you on our rate watch and will continually monitor your interest rate against the market and proactively contact you if an opportunity arises to improve your situation. Regardless, every homeowner who has a mortgage should take the time to have a free evaluation to ensure their loan is properly structured. Call 801.501.7950 or email me to arrange a time that we can discuss your review.

30 year fixed rate chart

Fantastic Creme Brulee

4 – cups chilled heavy cream

2/3 – cup granulated sugar

Pinch of salt

1 - vanilla bean, split in half lengthwise and seeds scraped out

12 – large egg yolks

8-12 - teaspoons turbinado sugar

1. Adjust oven rack to the lower-middle position and heat the oven to 300 degrees.
2. Combine 2 cups of the cream, the sugar, and salt in a medium sauce pan. Add the vanilla seeds to the pan, submerge the pod in the cream, and bring the mixture to a boil over medium heat, stirring occasionally to ensure the sugar dissolves. Remove the pan from the heat and let steep 15 minutes to infuse the flavors.
3. Meanwhile, place a kitchen towel in the bottom of a large baking dish or roasting pan and arrange eight 4 or 5 ounce ramekins (or shallow fluted dishes) on the towel. Bring a kettle or large sauce pan of water to a boil over high heat.
4. After cream has steeped, stir in remaining 2 cups cream to cool down mixture. Whisk yolks in large bowl until broken up and combined. Whisk about 1 cup cream mixture into yolks until loosened and combined; repeat with another 1 cup cream. Add remaining cream and whisk until evenly colored and thoroughly combined. Strain through fine-mesh strainer into 2-quart measuring cup or pitcher (or clean medium bowl); discard solids in strainer. Pour or ladle mixture into ramekins, dividing it evenly among them.
5. Carefully place baking dish with ramekins on oven rack; pour boiling water into dish, taking care not to splash water into ramekins, until water reaches two-thirds height of ramekins. Bake until centers of custards are just barely set and are no longer sloshy and digital instant-read thermometer inserted in centers registers 170 to 175 degrees, 30 to 35 minutes (25 to 30 minutes for shallow fluted dishes). Begin checking temperature about 5 minutes before recommended time.
6. Transfer ramekins to wire rack; cool to room temperature, about 2 hours. Set ramekins on rimmed baking sheet, cover tightly with plastic wrap, and refrigerate until cold, at least 4 hours or up to 4 days.
7. Uncover ramekins; if condensation has collected on custards, place paper towel on surface to soak up moisture. Sprinkle each with about 1 teaspoon turbinado sugar (1 1/2 teaspoons for shallow fluted dishes); tilt and tap ramekin for even coverage. Ignite torch and caramelize sugar. Refrigerate ramekins, uncovered, to re-chill, 30 to 45 minutes (but no longer); serve. Recipe compliments of Cooks Illustrated

Please let me know how it goes. I love to hear from you!!!!

Tobi Roberts

Each step is numbered based upon the priority. In other words, step one should be on track before moving on to step two, and so on. The problem is that many homeowners jump ahead before the prior step are mastered. This typically leads to living paycheck to paycheck, getting stuck in the consumer debt rut, or reaching retirement to find that you are equity rich and cash poor. By following the steps below, you can help ensure you reach retirement having achieved the long-term goals you desire.

Step 1 – Develop a Cash Reserve

The most important step is to have a reserve fund to cover short-term unplanned expenses. Without having cash reserve, shortages typically result in having consumer debt. Once consumer debt is established, it can lead to destructive long-term habits that are difficult to break. If you have a cash reserve, you should never have a need for unsecured debt.

Step 2 – Pay off ALL Consumer Debts

This is the step where you become consumer debt free, with the exception of your mortgage. Revolving and unsecured debts should be paid off first, with car loans and other secured loans being paid off second. Remember that cars are depreciating assets, and you will always have car expenses. If you are able to pay off your car, you can begin to save money to pay cash for your next car.

Step 3 – Create Significant Liquidity

One of the greatest gifts we have is the gift of compounding interest. This is the quadrant that grows and compounds. Even if you are not secure in steps 1 & 2, if possible, you need to develop the habit of putting cash into long-term investment accounts. Once you are secure in steps 1 & 2, make this quadrant your primary focus and watch your net worth rise over time.

Step 4 – Focus on Home Equity – Paying off your Mortgage

Once you have developed a cash reserve, have paid off all consumer debts, and are on track to meet or exceed your retirement goals, then you can put a focus on paying off your home loan.

Personal finance is most often a reflection of habits. If you develop good financial habits, and exercise them over-time, long-term you will likely do well. Not only can you use the four step plan to help you allocate cash flow in the budget, but you should also use the plan to help you to allocate cash and home equity net worth.

If you have specific questions regarding your personal situation, please call or send me an e-mail. Also, if you have a friend or family member in need of advice, I would be honored to help them as well. Having professional advisors to help you manage your investments, mortgage, taxes, and estate is the best way to protect your long-term results.

I look forward to your feedback. Feel free to email me at mike@citycreekmortgage.com