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How low will they go—is now the time to refinance?

The uncertainty of living during a pandemic brings a lot of questions with it, especially in regards to financial decisions. For instance, deciding whether now is the right time to refinance your house may be a source of stress for you. But don’t worry—we have some thoughts on how you can decide if now is the time to refinance:

Looking back

You probably learned about the Great Depression while you were in school. But, if you take a closer look at history, you will see that the economy is less like a straight line and more like the path of a yo-yo as it ebbs and flows. Living in one of the low points is never ideal, but rest assured that even in leaner times, refinancing is still possible.

Looking at the present

So you know what has happened before—now it’s time to look at your current situation. What do you hope to accomplish through refinancing your home? Are you looking for a lower interest rate, or do you hope to adjust the terms of your mortgage? Knowing your goals will allow you to move forward with a plan.

Looking to the future

Is the house you’re in the one you plan to stay in for the next few years? In other words, will you really benefit from refinancing your home? Look for the “break-even” point on your mortgage options to see if the new payments will make sense for the amount of time you plan to stay in your current home.

Decide if you’re ready

Your mother probably once asked you if you would do something wrong just because your friends were doing it. The same concept applies here—just because interest rates are low, or because you have seen friends successfully refinance their homes, does not mean it’s the right time for you. Take the time to decide if this is the best step for your current circumstances.

Research the process

If you have never refinanced before, the process will feel a lot like buying your home for the first time. But it’s still a good idea to research the steps you will need to take and what types of materials you may need to have available, like loan documents or other paperwork. There are multiple resources out there to help you find the information you need.

Find an expert

Your questions don’t have to go unanswered—talk to someone, like your accountant, about the questions you have and what you can expect from the refinancing process. Someone who is already familiar with your current financial situation will have better insight on what you can handle.

Look for the signs

Just as you might keep track of deals that car dealerships are offering, it’s a good idea to keep your finger on the pulse of economic developments. For example, while you can’t gauge whether refinancing is the right step for you based off low interest rates alone, seeing those rates go down means you are more likely to get a better rate if you refinance.

Check your credit score

Times are tough, and if your credit has taken a hit since you last refinanced your homes, you may not be able to take advantage of all the options available to you through refinancing. Be sure to check your credit score before refinancing (which we recommend you do regularly anyway) to keep track of any changes.

Consider your job stability

Just like when you bought your home, refinancing factors in a steady income. If you are not sure whether your job will be around in a few months, or if you will be working steady hours, you may want to wait until you are settled into more reliable employment.

Take the plunge

If you think this is the right time to refinance, then don’t wait—go ahead and start the process. It may take several months to finish your refinancing, so the sooner you can make the decision, the sooner you can enjoy your lowered interest or shortened mortgage term.

Only you can decide if the time is right to refinance, so do your research and consider all of your options. It may not be the right time for you, and that’s okay. If it is, go ahead and take that first step.

6 things to do if you’re preparing to sell your house

Selling a house is stressful. There just isn’t any way to sugarcoat it. But there are steps you can take to make the process a little easier – and a little more successful. Here are six things you need to do if you are about to put your house on the market.

1. Fix it up

That loose stair that you’re used to skipping every day or those holes in the wall behind the couch that resulted from an ill-fated indoor skateboarding incident are great examples of things you will want to address before you take any further steps to sell your home.

Even things that don’t pose a physical danger, like the peeling paint on your front door, still need to be worked on if you want your home to sell. Speaking of paint, now is the time to turn your neons into grays – if you have a lot of brightly painted rooms, consider painting them a more neutral color. Yes, people should look past things like paint color, but they often don’t, and it could make or break your success story with selling your house.

2. Disappear

Okay, don’t literally try to become invisible – what we mean is that you and the personal touches in your home should not be the most obvious thing a potential buyer sees. It may sound a little harsh, but the goal is to help the buyer feel as though they can make their own home in your house, which is hard to do if you have monogrammed throw pillows covering every inch of the couch.

You don’t have to go through your hallways and take down every single photo, but, at least when you know there will be a showing, try to make your home more neutral all around.

3. Keep it Clean

If you have kids and/or pets, you know how difficult it can be to clean your home in a moment’s notice after a realtor contacts you about a showing. If possible, try to schedule showings in advance, rather than having people stop by anytime. However, since you don’t want to miss an opportunity to show off your house to a potential buyer, you should also try to keep your house “showing-worthy” as much as possible.

You can even practice with your family – assign everyone a specific job, and then give them a signal to start cleaning. See how quickly you can get it done, and soon you will all be pros.

4. Take a Walk on the Wild Side

And by “wild side,” we mean your yard. You may be so used to the out-of-control hedges by your mailbox that you don’t even notice them anymore. But a buyer will definitely notice. Ask a friend or neighbor to walk around your yard and point out some areas that may need a little TLC before you put your house on the market.

Addressing the details outside of your home is just as important as addressing the details inside of your home. Keep the yard mowed, pull the weeds, and give your house the royal treatment to help others see its full potential.

5. Practice Some Feng Shui

Your house is set up to perfectly suit you and your family, which makes sense. However, one size does not fit all when it comes to furniture preferences. Take a look at your current living room arrangement, for example – are there any “bottleneck” areas that disrupt the flow of movement through your home? What about the couch and chairs – do they allow for conversation and group gatherings?

Even if you don’t use your home for these things, interested buyers might, so showing them how they can make this house work for them as well as it has worked for you is important.

6. Be Flexible

Everyone has their own opinion about what looks good, right? So you may spend three hours painting a room a neutral color, only to be told the house looks too plain. You may pull up weeds all weekend and learn that someone thinks your yard is too bare. The truth is, you can’t please everyone, so don’t take every piece of feedback from potential buyers to heart.

If you receive the same feedback over and over again, it would be wise to give it serious consideration. But if one person thinks your kitchen is too small, too dated, too blue, or not blue enough, remember that sometimes your house just won’t be a fit for everyone.

The right buyer is out there – if you put the work in on the front end, you and your family can reap the rewards down the line. Give your house its best chance to be seen for all its beauty, and consult your realtor for any other ideas they have seen work for their clients.

If you’re in the market for a new home, consider Georgia’s Own for all your mortgage needs. With low rates and fees, plus a variety of mortgage products, we’re here to help you in your home buying process. Click here to learn more about how Georgia’s Own can help get you into the home of your dreams.

Buying vs. renting a home: What’s the best move?

Many people make the decision daily on whether they want to buy or rent a home—however, it’s a choice that is not to be taken lightly. Like everything, there are various advantages and disadvantages to buying or renting a home. We’re here to break down those pros and cons to help make your decision process a little simpler.

Buying a home

Pros

Acquiring a home has numerous advantages that aren’t provided when it comes to renting. First, the financial benefits: when you purchase a home, you build equity. If the value of your home increases, then you have the opportunity to cash in on that value if you eventually sell. Also, there are potential tax benefits—if you choose to itemize deductions, you can itemize your mortgage interest when you file your tax return and thus cut your tax bill. Not only that, if you have a fixed-rate mortgage, you won’t need to worry about the rising cost of rent.

In addition to the financial perks, there are other substantial benefits. When you purchase a home, it’s truly yours. You don’t have a landlord to answer to, which means you don’t need to worry about seeking permission for home upgrades—you’re free to make all the renovations you desire. You also eliminate the possibility of your landlord selling the home and having to quickly scour for a new place.

Lastly, there are some intangible benefits. When you buy a home, you feel a sense of pride and accomplishment—you’ve finally achieved your lifelong goal of buying a home. While there is a sense of pride in being able to pay your rent and bills, finally reaching your goal of purchasing a home is an entirely different feeling. There is also a sense of belonging and stability. You now have a place you can truly call home for years to come.

Cons

Despite some of the amazing pros of purchasing a home, there are a few downsides to ponder. The most glaring drawback: it’s expensive. Let’s face it—buying a home costs a ton of money. Between closing costs, home inspections, and possible repairs, it can become egregious. It’s also a considerable amount of money upfront—a typical down payment is around 20% of the home’s cost. For example, if you are attempting to secure a home that costs $200,000, that would require a $40,000 down payment.

Another downside—when you own a home, repairs are solely your responsibility. From a new roof to broken air conditioning, there is an exorbitant number of things to be taken care of. Some things like fire, wind, or hail are covered by homeowner’s insurance. On a case by case basis, water damage is sometimes covered. However, the cost of home repairs can add up quickly and rapidly deplete your bank account.

Lastly, there is always potential to lose money if your home value declines. The environment, amenities, seasons, and maintenance are determinants of your home’s value. Bad schools, poor roads, or neighbors who neglect their property’s appearance are all factors that could drastically decrease the value of your home.

Renting 

Pros

There are copious benefits when it comes to renting, like extreme flexibility. If you needed to quit your job, pack up, and move across the country, it’s more manageable to get out of a lease agreement than sell your home. Even if you wanted to move across the city, you have the freedom to do so, practically hassle-free.

Renting can also be significantly more affordable. It requires fewer upfront costs, aside from a security deposit, which is a fraction of what you’d spend on a down payment for a home. You also forego property taxes, which saves a notable chunk of money. You’re also not responsible for maintenance or repairs. All of those combined make your monthly payments more predictable—you’re not scrambling at the last minute for unforeseen costs.

Cons

While there are advantages when it comes to renting, like anything, there are also downfalls. One downside: your landlord can raise the rent, which could potentially cost you more in the long-run, compared to a fixed-rate mortgage. Factoring in the spiraling cost of rent is a tremendous thing to consider—according to CNBC, rents are rising at the fastest pace in two years. There are also no tax benefits, and there is no ability to establish equity. Various restrictions also apply when it comes to upgrades—most landlords won’t permit you to paint walls, install new appliances, or remodel. There is limited freedom on what you can change.

Deciding to purchase or rent a home is an enormous decision, and it’s not cut and dry either. There are various factors to think about when you’re questioning if you should continue renting or choose to make the big leap and acquire your own home. It’s critical to think about how long you want to stay in your home, how much money you have for unforeseen expenses, as well as if you’re carrying any debt. At the end of the day, it’s about you, your needs, and what works best for your lifestyle.

6 tips to save for your future home

So, you’ve decided you want to buy your first home. It’s an exciting time, but there are various things to consider—the most significant being a down payment. Standard down payments are approximately 20% of a home’s cost. If you’re purchasing a $200,000 home, your down payment could cost upwards of $40,000—that’s a considerable amount of money! It seems daunting to think about saving that much money, but it can be accomplished—here are some tips to help you start saving towards your first home purchase.

1. Determine a goal

If you haven’t already, determine how much you need to save. Set a definite goal and time frame, that way you have a tangible end within your reach. Then, set a monthly budget so you aren’t overspending and can accumulate as much money as possible. An essential thing to consider is ensuring you are debt-free—focus on paying off your debts before you acquire more. It’ll save you more stress in the long run if you pay off that student loan or credit card before making a big purchase like this.

2. Look into a savings account

If you already have a savings account, then great. However, there are more options than a traditional savings account that will help immensely when saving for a down payment. Look into a high-yield savings account or money market account. You’ll earn more interest than you would with a traditional savings account—the longer your money sits in the account, the more interest you earn, which ultimately puts you closer to attaining your goal of owning a home.

You can also consider a Certificate of Deposit, otherwise known as a CD. CDs enable you to set money aside for a predetermined time, so you earn a set amount of interest. There is less flexibility and liquidity, but this is ideal if you have a particular time frame where you want to meet your goal. However, it’s crucial to note that you could be subject to a fee if you prematurely withdraw funds.

3. Cut unnecessary expenses

When you’re preparing your budget, look at where you spend the most amount of money. If it’s unnecessary, cut it out. Things like going out to dinner or buying coffee start to add up—if you spend $5 per day on coffee, that totals up to $25 per week. It doesn’t sound horrible, but if you proceed to do that weekly, it costs $1,300 per year. Shocking, right? Imagine how much closer you’d be to your down payment if you simply brewed that coffee at home. 

4. Pause saving for retirement

Odds are, you’ve probably begun saving for retirement. It may seem strange not setting money towards your 401(k) at first, but just remember, it puts you that much closer towards your goal of owning a home. If that idea scares you, just remember—it’s only temporary. You can start putting money towards your retirement again once you’ve purchased your home. However, despite what some websites may say, absolutely do not withdraw from your retirement account. You could be slapped with penalties and taxes for withdrawing early.

5. Set aside your bonus

Got a bonus or tax refund? Be responsible: put it into your savings—you’ll be thankful you did when you’re relaxing in your cozy breakfast nook, sipping on a hot cup of home-brewed coffee. As tempting as it is to solely use your refund on a new wardrobe or a fancy dinner, every dollar counts when you’re saving for a home.

6. Get creative

I can assure you, things are lying throughout your apartment and collecting dust. Scour and gather everything you’re not using, and sell them. Or, ditch the summer vacation. According to Business Insider, people fork over nearly $2,000 annually on summer vacations. I know—vacations are sometimes necessary, but foregoing your family trip this year will catapult you towards attaining your goal. Do you like animals? Start offering to pet sit or walk your neighbors’ dogs. Or, you could begin driving for a rideshare service or food delivery. Take that extra cash you earn and immediately put in your savings. You won’t miss it—I promise.

If you’ve done all of these but still need some backing, many credit unions offer down payment assistance programs for first-time home buyers. These programs help with home financing, loans for first-time buyers, and more. There are also various federal and state programs that offer similar support. However, it’s critical to keep in mind that you’ll pay more interest with a lower down payment.

Saving up for a home seems intimidating, and with such a large amount of money, it’s hard to imagine ever being able to save that much. These pointers will aid you in reaching your goal, so you can finally fulfill your aspiration of owning a home.

Have questions about buying your first home? We’re here to help!

Mortgage loan process flow

What is the mortgage process? Georgia’s Own mortgage experts, discuss the mortgage loan process flow.

At Georgia’s Own Credit Union, we’re here to provide our members with an exceptional experience, that’s why we’ve constructed a smooth loan process just for you!

After you and your mortgage loan officer complete the initial application, your loan officer will be given a team to help speed it through to closing. The loan process has three main steps:

1. Your loan processor will verify the data in the file and order required reviews, such as the appraisal, and submit the loan to underwriting.
2. Underwriting will evaluate the information in your file to confirm you meet the guidelines of the loan product.
3. Once approved, your loan will go to closing where they will prepare the necessary legal documents and coordinate with the closing attorney.

Our goal is to ensure that this process flows smoothly and that your closing is a time of celebration. Remember, your Georgia’s Own representative is ready to help you with your mortgage lending needs.

Click here for more information about our mortgage products.

Three common misconceptions before applying for a mortgage loan

Georgia’s Own mortgage experts discuss three common misconceptions you should know about before applying for a mortgage loan.

At Georgia’s Own Credit Union, we’re here to provide our members with an exceptional experience. We know mortgage lending can be a little intimidating so we want to tackle three common misconceptions and telling you what you really need to know before applying for a mortgage loan.

1. “I need a minimum of 20% for my down payment.” – This is actually false. There are loans available with 10% down, 5%, 3% and even 0% down payment requirements.
2. “The details don’t really matter.” – Actually because mortgage lending uses what is called risk-based pricing, the details in a mortgage loan are your best friend. This means the mortgage loan that you qualify for and the rates associated with it are determined by your specific details.
3. “I need perfect credit to qualify for a mortgage loan.” – Here’s the big secret, no one has perfect credit. Yes, some people have excellent payment records, but that doesn’t mean it won’t be a challenge. Always assume the best and work your mortgage loan officer so they can help you get what you need.

Don’t let the intimidation factor of the mortgage process get you down or stop you from achieving your dreams. Remember, your Georgia’s Own representative is ready to help you with your mortgage lending needs.

Click here for more information about our mortgage products.