your monthly budget too much — your mortgage payment (including principal, interest, taxes, and insurance) should be a maximum of 28% of your pre-tax income. 3. Switch from a variable rate to a fixed rate: You may already have a low rate if you have a variable rate loan, but in the future that rate could move higher. Current low rates on fixed mortgages may make this a great opportunity to lock in an historically low rate that will not fluctuate over the life of the loan. 4. You are currently paying PMI: If you did not put enough down when you purchased your home, you may be paying private mortgage insurance or PMI. Many homes have seen a significant increase in value this year, so you may now have enough equity to eliminate your PMI. Refinancing is not the only way to achieve this, but you may be able to score a lower rate and get rid of your PMI at the same time.
Marc Stuckart, CPFA® & Creighton Stuckart, CFP®
Seeking out a path toward financial wellness that works for you. Financial Advisors offering securities through Cetera Advisor Networks LLC, member FINRA/SIPC. Advisory services offered through Summit Financial Group, Inc, a registered investment adviser.
2 Park Lane, Suite 203, Hilton Head Island, SC 29928 | 843-341-3300 | atlanticinvestorshhi.com Summit and Cetera are affiliated and under separate ownership from any other named entity.
5. Cash out refinances: There are many different reasons you might want to access some of your home’s equity such as a renovation or addition or to pay off higher interest credit card or student loan debt. You may be able to access some of the equity in your home while simultaneously the term and/or interest rate of your loan. If you do lower your payment, consider how you will use that money. One option is to pay down other debt, like credit cards or student loans, more aggressively, or you could make additional principal payments on your mortgage. This will reduce the amount you pay to interest on those debts. Another option is to save or invest your monthly mortgage savings. This is money that you are used to spending every month, so it’s a great idea to put it to work toward your financial goals. Jenn Sokolowski is a certified financial planner for Metis Wealth Management and Planning.
A P R I L 2 0 2 1 // 43
