Technically, The Fed’s decision in July to lower interest rates by a quarter-point doesn’t directly affect mortgages. In reality, there are usually some things to keep in mind with any rate decrease or increase.
The Federal Funds rate is a measure of short-term borrowing, or the rate that banks use to lend money to each other. Mortgages are long-term notes.
If you have an adjustable-rate mortgage, you’ll probably see your interest rate go down when there’s a cut. To put that in perspective, a Bankrate article said that a HELOC (home equity line of credit) of $100,000 rises or falls about $250 a year with every change of 0.25 percent in interest rate, up or down. That works out to about $21 a month.
Additionally, variable-rate mortgages usually adjust annually, on their anniversary dates, and some don’t adjust at all for the first two to seven years.
However, this could be a good time to refinance into a fixed-rate mortgage and lock in the historically low rates. The average rate on a 30-year mortgage fell to 3.75 percent, down from a high of almost 5 percent in 2018.
Do a little math to figure out your savings over time, as well as closing costs, to determine whether this is a good move for you.
Month: October 2019
Is flood insurance part of regular homeowners insurance?
Cypress, TX has seen its share of flooding in recent times, and there is always a possibility there could be another natural disaster in the area. Unfortunately for homeowners who did not have flood insurance during the last flooding, this is not something that is covered in a standard homeowner’s policy.
Before you decide to purchase flood insurance, you need to understand the risk in your area and what kind of protection exists. At InsureUS, we can help you assess your future risks look through your options.
Do you live in a flood zone?
If you live in a designated flood zone, you will need to purchase flood insurance to even get a mortgage. Even if you aren’t close to a body of water, there could be other problems like drainage issues that make your area a flood zone.
Replacement cost or actual cash value?
When choosing a policy, you will need to decide how much insurance you need. That will be based on the value of your home and possessions, but you can also choose a policy that will rebuild your home as it was instead of just offering you the current market value.
Don’t wait
If you do experience flooding, your policy already needs to be in place. There is a 30-day period after you purchase flood insurance before it goes into effect.
Whether you own or rent your home in Cypress, TX, your standard homeowners or renters insurance will not protect you in case of flooding. You will need to have a policy that specifically covers your home during a flood. If you are interested in purchasing flood insurance, or if you just have any questions about it, please feel free to call InsureUS today.
Hot trend: Build to rent
An interesting real estate trend has cropped up in recent years: while demand for rents has stayed strong, consumers have also turned their attention to single-family homes.
Renting is like having a home without the commitment. Or living in a home but retaining the agility to up and move quickly.
As prices of single-family homes have risen and lending remains strict, down payments and loans have become harder to come by. Add in Millennials, a generation of buyers with sometimes staggering student loan debt but growing families, or Baby Boomers, who don’t want the headaches involved with homeownership.
Flexibility and mobility have become the driving force.
Now, builders and investors are building single-family homes with the intent to rent instead of sell. In one of the bigger moves nationwide, Toll Brothers announced earlier this year that it had committed to invest $60 million in a $400 million venture that would build homes for rent in seven major U.S. cities.
An article in CNBC this summer called the built-to-rent (or B2R), the fastest-growing trend in real estate. Last year, about 43,000 single-family homes were built for rent, it said. And the built-for-rent share of housing starts is also rising, to nearly double its recent historical average from 1992-2012.
In Pradera, a gated community of three- and four-bedroom homes in San Antonio, Texas, the rents are $1,800 to $2,300 a month and the community includes a pool, fitness center, community kitchen and party space, plus dog park and dog-washing station. Interestingly, the average annual household income in Pradera is more than $100,000 — meaning many of the tenants can afford to buy but have chosen not to.
Wage and hourly lawsuits: Easy to file, devastating to lose
As a small business owner, are you 100 percent sure you’re paying employees correctly? Are you tracking their hours accurately? Are those you’ve classified as exempt really doing the work that qualifies them for it?
If not, take a sharp eye to your payment system very soon.
In the last few years, numerous small businesses have been hit by lawsuits citing them for underpaying or misclassifying employees, failure to pay required wages, and sufficient overtime.
And the smaller the company, the higher the risk.
Also, the threat to unprepared employers will increase early next year when a rule proposed by the U.S. Department of Labor takes effect. In its current form, the law would make an estimated one million more workers eligible for overtime pay.
Any vulnerabilities in a business’ payment system are red meat for plaintiff lawyers who appear to be getting more successful in their pursuits. They won 79 percent of 273 wage-and-hour certification decisions in 2018, an increase of six percent over the previous year.
Companies also absorbed a decrease of 11 percent in their odds of defeating cases with successful decertification motions.
Even more foreboding is the lone discontented employee who could hire a plaintiff attorney who then could parlay the case into a class-action lawsuit that would be very expensive for any company to fight.
According to the Society for Human Resource Management, wage and hour disputes are cash cows for plaintiff attorneys: Their fees are easier to obtain than in other forms of commercial litigation.
To protect your business–and ultimately you and your family–make sure that all your workers (contractors, staff, overtime-exempt, and non-exempt) are classified correctly, and that they are being paid according to federal and state laws.
Also, seriously consider proposing an arbitration agreement with your employees that includes a class-action waiver.
Entrepreneur Michael Rubin: Bankrupt at 16, Millionaire at 21, Billionaire at 38
At the age of 16, Michael Rubin said there are only two kinds of business people: Those who take risks, and those who are rational.
What was he?
At 16, is it risky to own a snow-ski business in Pennsylvania’s sweltering summers while owing creditors more than $200,000?
At 21, is it rational to own a business worth $1 million, and $50 million a couple of years later?
According to Rubin, being $200,000 in debt was “a near-to-death” encounter.
Somehow, someway, he managed to pacify his creditors with the $37,000 he borrowed from his father. Then, honoring his Dad’s terms of the deal, he enrolled in college.
Six weeks later, he dropped out of Villanova University. Too boring, he said, answering the calls of his businesses.
Working smart had inspired Rubin since he was a kid.
At the age of eight, according to Enrepreneur.com, he was walking door-to-door selling vegetable seeds to his West Philadelphia neighbors. At 12, he’d opened Mike’s Ski Shop in the basement of his parents’ home.
At 14, he was operating a chain of ski shops, businesses, and a discount ski equipment retail shop (hence, the debt).
At 19, he had merged his burgeoning ski business, KPR Sports (named with his parents’ initials), with then publicly-traded athletic shoe company Ryka to form Global Sports Inc. (later GSI Commerce).
At 26, GSI was generating more than $130 million a year.
At 38, Rubin had sold GSI Commerce to eBay for $2.4 billion.
Rubin then bought and merged Fanatics (a licensed apparel retailer), Rue La La (a fashion flash site seller), and Shop Runner (a retail benefits program) and molded them into Kynetic, a billion-dollar e-commerce company.
Rubin is 47 now, and according to Forbes, his net worth is $3 billion.
