The beginning of the year is a good time for homeowners to review the responsibilities that come with homeownership and to continue to take the steps necessary to protect their investment. While mortgage rates are up about one quarter of a percent from where they were last year at this time, rates are still historically and unbelievably low. If you have not yet made an effort to determine if refinancing is a smart option, it is not too late.
Homeowners with low mortgage balances or rates below 5 percent may be best served by sticking with their current mortgage and increasing the monthly mortgage payments. Send me an email with your particulars and I will send you an amortization schedule that will demonstrate the savings you could enjoy without refinancing. Home owners who have higher rates, adjustable rate mortgages, Home Equity Lines of Credit (HELOC) or those who would like to create cash to cover future expenses (college, remodeling, retirement, divorce, etc.) should not hesitate to meet with a mortgage professional to discuss their financing options because mortgage rates will be rising more this year.
However, homeowners with 30 year fixed rates at or above 4.5 percent may benefit by refinancing into a new 10 or 15 year mortgage. The rates on these products are about three quarters of a percent lower in rate than the 30 year fixed rates. Sure, the payments may be higher but the day you make your final mortgage payment comes sooner too and the savings on mortgage interest can be in the tens of thousands of dollars!
This is also a good time of year to run an insurance check on your home. Homeowner’s insurance may cover such things as fire, flood, injury, earthquake, etc. Since premiums are based on your home’s value and cost to repair and/or replace, insurance policies need to be constantly reviewed with your insurance agent to make sure you are adequately covered. Don’t let your insurance lapse. We have all read about the insurance coverage that had just been dropped (for one reason or another) immediately prior to a catastrophe. Stay in touch with your insurance agent, he or she is your friend. Any home owner with a mortgage is required to carry fire insurance (earthquake coverage is not a requirement) but it goes without saying that even home owners that do not have a mortgage should make sure their investment is fully insured.
The median value of a single family home (does not include condominiums) in Santa Cruz County hit a high of $790,000 in August, 2007. By February of 2009 the median home price had dropped to $404,500. Based on the most current data available, the Santa Cruz County Association of Realtors reports the median home price in November, 2016 had risen to $790,000. This November value represents an increase of 11 percent over the same month in 2015.