Whether you’re new to Bend or you’re a Bend native who can handle a roundabout like a pro, local homeowners have made a unique financial commitment that requires some thoughtful financial planning. Here are a few suggestions which can help you create a smoother, more certain path to financial freedom.
Revisit your budget items, both large and small: Sure, you’ve examined the pros and cons of refinancing your five percent or more interest rate mortgage to a lower rate, right? No? If you haven’t, the low-interest-rate window may be closing very soon, so definitely evaluate whether it makes sense to do a refi. And have you also looked carefully at your homeowners insurance? It may be worth the time to speak with an agent and determine whether your substantially appreciated property which you’ve made improvements to has sufficient coverage.
Create an emergency fund: If you recently purchased your home, you may not yet have a good “feel” for what your utility bills and landscaping costs will be. Or whether the HVAC system making that unsettling rattle is going to make it through the summer. Consider setting aside $10,000 to $15,000 of extra cash or very safe, easily-accessible investments — especially for the first couple of years of ownership — to handle unexpected costs.
If you’ve already lived in your home for five years or more or did not obtain one on your recent purchase, get an inspection done. You’ve heard it before; your home is among your biggest investments. A home inspection every so often can head off costly, time-intensive repairs. Or, at the very least, is a great way to verify that your home is safe for you, your family and your guests. And addressing the issues that a home inspection sometimes uncovers will also keep your home ready for a potential quick sale in the future.
Look at getting a HELOC: A Home Equity Line of Credit is often free to apply for, and free to maintain. The bank uses some of the available value of your home as collateral in order to create a flexible source of cash, and the interest rate — should you choose to borrow from it — is typically much lower than other forms of consumer credit. That available cash can come in handy for emergencies, or paying for home improvements. With Bend’s appreciated property values, there is a good chance that you have enough equity in your home to create a HELOC. Keep in mind that it often takes a couple of months to get the HELOC created.
Update life insurance coverage: One of the basic purposes of life insurance is to provide cash for the surviving spouse/partner to pay off a debt in order to maintain their lifestyle. If you have a mortgage, consider obtaining a term life insurance policy to inexpensively meet some or all of that financial obligation. Look into Disability insurance: If you or your significant other became unable to work for an extended period of time, could you afford to stay in your home? If not, there’s a good chance you don’t have disability insurance, a cost-effective way of addressing a potential loss of income.
Invite in a realtor to your home: Before painting your home’s interior fuchsia, or adding built-in shelving in every nook and cranny, getting an expert’s opinion on whether those choices add or detract to your home’s value might be a good idea. Sure, make your house your own. But get a sense of how your “improvement” may impact your home’s salability in the future. No better person to ask than your friendly neighborhood realtor.
Financial fitness involves addressing potential risks before they become actual costs that take you off track on the path to financial freedom. And the financial risks to homeowners can be complex, so I hope you find these tips helpful. To learn more, contact me at stu@bendwealth.com.
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Bend Wealth Advisors is not a registered broker/dealer and is independent of Raymond James Financial Services.
Raymond James Financial Services and your Raymond James Financial Advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer or negotiate terms of any such loan.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Stu Malakoff and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP certification mark, the CERTIFIED FINANCIAL PLANNER certification mark, and the CFP certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
