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Understanding Mortgage Recasting

If you’ve had a mortgage for any amount of time, you’ve heard of refinancing especially when interest rates go down. You’ve probably received offers in the mail for it, too. Most homeowners dream of the day they can pay off their mortgage. But most people have never heard of mortgage recasting.

 

What is Mortgage Recasting?

 

An alternative to refinancing your mortgage, mortgage recasting can occur when you pay a large sum of money towards your principal balance. Assuming your mortgage lender offers the service, your loan will be reamortized and recalculated based on the lower balance. Your interest rate and loan terms will stay the same, but the payment will be lower.

 

Benefits of Mortgage Recasting

 

Although it’s a little-known option, there are several benefits to having your mortgage recast.

 

  • Your mortgage payment will be lower.
  • You can continue to make the same payment you’ve always made but more will be applied to your principle balance.
  • It’s simpler than refinancing because no credit check or appraisal is required.
  • Mortgage recasting can be much less expensive than refinancing.

 

What You Need to Know About Mortgage Recasting

 

Like all things in life, mortgage recasting isn’t for everyone. While it may sound like a great way to use a large sum of money or a good way to lower your expenses, not everyone can recast their mortgage.

 

  • Not all loans are eligible. FHA and VA loans cannot be recast.
  • Not all lenders offer mortgage recasting. You’ll have to contact your mortgage lender to find out.
  • Some lenders charge a fee. It may be a few hundred dollars or more.
  • Jumbo and non-conforming loans aren’t always eligible.

 

Whether or not you’re eligible to recast your mortgage, you should ask yourself one question. Would your money be better spent on credit card debt, student loan debt, in savings, or some other way? The idea of paying down your mortgage or lowering your housing costs sounds good but you may have other ways to lower your expenses.

 

If you think you may be a good candidate for mortgage recasting and want to put lump sum inheritance or proceeds from a sale to good use, contact your mortgage lender. They can help you understand all your options.

Do You Have Flood Insurance?

 We’ve all seen images of the devastation that Hurricane (and later Tropical Storm) Harvey left in it’s wake with two landfalls and mind-boggling amounts of rainfall and flooding. The most recent count puts the rain dropped on Houston and the surrounding areas at 24.5 trillion gallons of water.
 
Our hearts go out to everyone affected by the storm and flooding in both Texas and Louisiana.
 
As Floridians, especially living on the Emerald Coast, we know better than most. Hurricane Ivan,
 
Hurricane Opal, Hurricane Andrew – some names conjure up immediate memories and feelings.
 
A Shocking Number
 
Fifty inches of rain. 24.5 trillion gallons of water. Thousands of homes destroyed. Tens of
 
thousands of people displaced, losing everything. The numbers are staggering.
 
One number that may shock you? Somewhere between 80 and 85 percent of Houston homeowners don’t have flood insurance. Not only have they lost everything, they may not have help from insurance companies to completely rebuild. Before you wonder to yourself why anyone living in a flood zone like Houston would go without flood insurance, ask yourself one question. Do you have flood insurance?
 
We Can’t Imagine It Until It Happens
 
The reality is that anywhere it rains, it can potentially flood. Now put yourself in a coastal region or near a major river. Live in a low-lying area. Not only is this common, it should sound familiar to nearly everyone living on the Emerald Coast.
 
The National Flood Insurance Program (NFIP) is by no means perfect, and rates have gone up over the years. But one glimpse of the water covering parts of Texas and Louisiana should remind you that, under different circumstances, this could have been Northwest Florida. We’re no strangers to hurricanes, even if it has been more than a decade since we suffered devastating losses on a similar scale.
 
Don’t Wait for the Flood to Hit
 
The NFIP is up for reauthorization in Congress, and by some accounts, it’s in trouble. Right now, though, it’s the program we have available. If you don’t have flood insurance right now, call your insurance provider. A flood insurance policy doesn’t go into effect immediately – there’s a 30 day waiting period. The sooner you sign up, the better off you’ll be.
 
And as for the NFIP? Call your Senator or Representative and remind them that Harvey could have hit Florida. We don’t even need a hurricane to cause massive flooding on the Emerald Coast – only too much rain. Property owners need a flood insurance program that’s affordable for homeowners and able to help people rebuild when flooding occurs.
 
Talk to your insurance agent today about flood insurance policies. If you’re not in a high risk zone, your premiums may not be as high as you fear. And remember, there’s no such thing as a no-risk zone. Anywhere there’s water, there’s the potential for flooding.
 
Want to help Louisiana and Texas in their recovery efforts? The New York Times has a great list of local, state, and national charities to donate to that are genuinely helping victims. National organizations you can donate to include the American Red Cross, AmeriCares, Save the Children, and the Salvation Army. 
 
 

Can You Use the Equity In Your Home to Start a Business?

You’ve always wanted to own a small business. No more working for someone else. Owning your own business means you’re working toward something bigger, building something for your family, and taking control of your financial future. It’s exciting, nerve-wracking, and scary. It’s also expensive, especially when you first start.

 

How do people do it? Where do they get the money? Believe it or not, some people use their homes to start their businesses.

 

How Home Equity is Being Used

 

According to information released by the U.S. Census Bureau, home equity has been used as a source of capital for nearly 300,000 businesses, or 7.3 percent of all new businesses, between 2014 and 2017. These businesses aren’t your typical home-based options you might think of. The top new businesses include accommodation, food service, retail, manufacturing, wholesale trade, and educational services.

 

People borrowed between $50,000 and $99,999 through home equity loans for their new businesses. The data also shows that more women than men used the equity in their home and more minorities have taken this route as well. African Americans, Asian Americans, American Indian, Alaskan Natives, and Pacific Islanders/Hawaiians use home equity loans in greater percentages than other groups.

 

Why Home Equity Loans?

 

The reasons for using a home equity loan instead of other forms of financing are as varied as the businesses people start. Although home equity loans took a deep dive during the housing market crash, they are on the rise again. Fewer homeowners are underwater. Values have climbed. People have stayed in their home long enough to rebuild their equity.

 

There are two types of home equity loans. The standard loan allows homeowners to borrow a lump sum amount. The other option is a home equity line of credit or HELOC. A HELOC allows a homeowner to borrow only what they need as they need it against whatever total amount they’re approved for. HELOCs tend to be popular for business owners because you only pay interest on what you borrow, and you have a period of time before you have to begin paying it back, usually around 10 years.

 

Getting a Home Equity Loan

 

To find out if you qualify for a home equity loan and how much you can borrow, you’ll want to speak to a lender. They’ll discuss rates, fees, repayment terms, and the application process. Most lenders want you to have more than 20 percent equity in your home so that after you take out some of the equity, you still have at least 20 percent equity remaining. This may limit the amount you can borrow.

 

Before applying for a home equity loan, remember the money has to be paid back either over time or upon sale of your home. If you’re planning on moving soon or will use the sale of your home to help buy the next, carefully consider whether now is the right time for a home equity loan.

 

Being a business owner means you have to think out of the box on a regular basis. Using the equity in your home may not be common but it’s definitely effective. Talk to a lender before you commit so you know exactly what you’re getting into. Understand the terms of the loan and the realities of what it means to increase your mortgage and own a business. These decisions shouldn’t be taken lightly, but they can be rewarding.

16 Back to School Tips to Make the Whole Year Better

School has started, and you’ve got months of early wake-up times, school lunches, homework, and projects ahead of you and your kids. It can take some time to get into a routine for everyone once summer ends. Here are some things to keep in mind that you may have done for the first day that you should keep doing all year long.

 

 

  1. Remind your nervous or shy child that other kids are nervous too.
  2. Point out the positives of going back like seeing old friends and making new ones.
  3. Focus on the good things that happen during the day like their favorite class or sitting with a friend at lunch.
  4. Help your child choose a comfortable backpack that’s easy to carry.
  5. Remind them that using both straps will keep their back and shoulders from aching.
  6. Pack as lightly as possible, only taking what’s necessary. With older kids, this may mean cleaning out the backpack once a week.
  7. Organize their backpack so that the heaviest items are at the bottom.
  8. Encourage your child to use their locker if they can and only bring home what’s necessary.
  9. If the school allows it, consider buying a rolling backpack for the school year.
  10. If they take the bus, make sure they know where the bus stop is, what bus to ride, and what time to be at their stop in the morning.
  11. For parents who drop their kids off at the bus stop, give yourself a few extra minutes – especially at the beginning of the school year – in case you run late or the bus runs early.
  12. If riding in a car, make sure you’re both comfortable with the driver if it’s not you or your child’s other parent.
  13. Remind your child to always wear their seatbelt in the car.
  14. Know the pick-up and drop-off times as well as the location of car-riders at the school if you’re driving your children to school.
  15. Give yourself plenty of time to get through the car rider lines for the first few weeks. Everyone is learning the new routine, and it will take longer until they do.
  16. Make sure bikers and walkers know the route to school, can and will follow all traffic laws, and will listen to crossing guards. You may want to find out where crossing guards will be along the route to school ahead of time.

 

The first day of school is an exciting time every year, even if your kids don’t completely agree. It’s the second week, third month, and around the holidays when everyone starts to wonder if summer will ever get here. If you can establish strong routines now, you and your kids can get through the year a little easier.

 

Should You Refinance Your Home?

When you’ve lived in your home for a few years, things tend to change as time goes by. The value of your home usually increases. Your credit score improves as long as you pay your mortgage on time. Mortgage interest rates go down for the general public. Put these three things together, and it’s possible you could pay less for your current mortgage. You might want to consider refinancing your mortgage.

 

According to a recent report from Black Knight Financial Services, 4.5 million homeowners are currently eligible to refinance. The average borrower may save around $260 a month, and 700,000 owners could save $400 or more each month. Do you wonder if you should refinance your home? Here are a few reasons to consider it, and a few reasons to pass.

 

Reasons to Refinance

 

Every homeowner’s situation is unique, and refinancing a 30 year mortgage is a big deal. If you wonder whether it’s a good idea for you, see if any of these reasons apply to you.

 

  • You want to save money on your mortgage.
  • You plan on living in your current home for many years.
  • You have a higher interest rate than current mortgage rates you hear about.
  • You need to switch to a fixed rate mortgage from an adjustable rate mortgage.
  • You want to pull out the equity to pay for a home remodel or college tuition.
  • You need to consolidate old debt.

 

Just because you have a good reason to refinance doesn’t mean you’ll be able to. Make sure to talk to a lender to find out if you qualify and what you’ll need to do to refinance your mortgage.

 

Reasons to Hold Off on a Refinance

 

Not everyone should or needs to refinance their home. You may want to and not be in a good position to do so right now or it may not save you money. Here are a few reasons why you may need to hold off on refinancing right now.

 

  • Your loan is underwater, and you owe more than your home is worth. Wait until you pay the mortgage down or values improve.
  • Your credit score is too low to qualify for the best rates. Keep paying your bills on time and rebuild your credit history.
  • You plan to move in a couple of years. Refinance now, and you’ll get a lower interest rate, but you may make a bigger home unaffordable for yourself if the interest rate on your next purchase increases one or two percent.
  • Your current interest rate is relatively low. You won’t see any actual savings.

 

If you’re curious about how you can save money on your current mortgage or whether you’re a good candidate to refinance, talk to a mortgage lender. When you’re ready to buy your next home, work with a real estate professional.

August 2017 Events Across the Emerald Coast

With August, comes more heat, a few more days at the beach, and the start of school. Before the kids head back to the books, make sure the entire family takes advantage of all the fun ways to enjoy the Emerald Coast.

 

2017 Emerald Coast Poker Run

Wednesday, August 9 through Sunday, August 13

Fort Walton Beach and Destin

 

Celebrate Emerald Coast Boat Week with the 25th Anniversary of the Emerald Coast Poker Run. Over the past 25 years, the Poker Run and Boat Week have helped raise over $2 million for the Emerald Coast Foundation. This year’s run continues to support this amazing organization that supports children’s charities and youth organizations in Okaloosa County. Join in the fun! Learn more.

 

Last Summer Movie in the Park for 2017

Saturday, August 5

Uptown Station, Fort Walton Beach

 

Bring the family for the last free movie in the park at Uptown Station for the summer. Movies begin around 7:30 p.m. or whenever it gets dark. In August, the movie will be Monster Trucks Learn more.

 

Okaloosa Island Fireworks

August 2 and August 9 at 9:00 p.m.

Okaloosa Island

 

Need a mid-week pick-me-up? Head on over to The Boardwalk on Okaloosa Island every Wednesday through the summer for a great fireworks show! Learn more.

 

Downtown Fort Walton Beach Farmer’s Market

2nd and 4th Saturdays in August

8:00 a.m. – 1:00 p.m.

Fort Walton Beach Landing

 

Nothing tastes better than locally grown produced and homemade food. That’s just some of what you’ll find at the Farmer’s Market in Fort Walton Beach. You’ll also find crafts and other artisan vendors too! Learn more.

 

Rock the Dock

August 3 and 10; 7:00 p.m. to 9:00 p.m.

Harborwalk Village, Destin

 

Make the first two Saturday nights in August better with free concerts at Harborwalk Village. Learn more.