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Prospective home buyers are finding more leverage through a 20% year-over-year increase in housing inventory, combined with cooling sticker prices for homes. A few of these buyers may be able to locate an assumable mortgage with a low rate from early 2021. While the housing "thaw" provides some relief, inflation is still affecting consumer spending, although showing signs of cooling slightly.
Home Financing
Nostalgic for Low Rates? So Are Assumable Mortgages.
While mortgage interest rates aren't expected to sink to pandemic-era levels, it's still possible to secure a home with financing under current market rates. This is achievable with an assumable mortgage, as they allow a buyer to take over a seller's existing mortgage.
Most conforming and Jumbo loans aren't assumable, but most government-backed mortgages, including FHA, VA and USDA mortgages, allow a new buyer to assume the existing loan. However, there are a couple of catches: in addition to very few being available, taking over the loan can be expensive. This is because a down payment that's equal to the difference between the purchase price and the seller's loan balance is usually required. Depending on the age of the loan, this can add up to a much bigger sum than a 20% down payment.
If you're interested, there are several ways you can locate properties with assumable loans. Specialized search companies may be able to assist (subscriptions are usually necessary), and some buyers have found homes with assumable financing near military installations. Questions about possible financing options? Call your local APM loan advisor for more information.
Source: npr.org
Assumptions are subject to lender approval, qualifying credit scores, and program-specific eligibility requirements.
Insurance
Life Changes. So Will Your Insurance Needs.
While we're aware of our basic insurance needs — auto, homeowners, health and life — this doesn't mean that the best coverage will always be the easiest to find, or the cheapest. Here are three situations when you may benefit by consulting an insurance professional, depending on your future plans and family's needs.
If you have young children. If your employer provides you with group life insurance, you're probably thinking that it's adequate for as long as you're at your current job. However, the payout may not be more than one or two years' salary.
This means that if you have younger children, you'll probably want to buy additional coverage. Supplementing your employer's group coverage with an individual life term policy valued at $1 million or more is recommended.
If you're planning to buy long-term care coverage. More than 80% of aging Americans will eventually need help with everyday activities, such as dressing and preparing meals. The costs of this care add up quickly, even for those able to "age in place".
While long-term care insurance is an option, it can be expensive, especially if you wait until you're almost ready to retire before you buy it. However, you can look at a hybrid product that offers both long-term care coverage and life insurance. For example, you can consider a life insurance policy with a long-term care rider.
If you're looking for more ways to save. One misconception about life insurance is that its only purpose is to pay a death benefit. However, you have other choices. For example, you can buy permanent life insurance that lasts to the end of your life, building cash value for you. These funds can fund your retirement or someone else's education.
Remember, tax laws are subject to change. This is not tax advice. If you'd like assistance with reviewing your insurance needs, contact me for a referral to a financial advisor or insurance agent, or consult a qualified tax pro.
Source: usatoday.com
In the News
How to Open a 530A Account for a Child
You may remember news of a special savings account for under-18s that was announced last year. These evolved into 530A tax-deferred investment accounts, nicknamed Trump Accounts. Children born from January 1, 2025 to December 31, 2028 will receive $1,000 in seed money to their accounts, courtesy of the federal government.
To qualify for a 530A account, your child must be a U.S. citizen and have an SSN. You can open a Trump Account for any qualifying child under the age of 18; however, the $1,000 match is only open to those born during 2025 to 2028.
To get started, file Form 4547 (Trump Account Elections) with your 2025 federal income tax return. Form 4547 enables you to apply for the account and claim the $1,000 "newborn match" if eligible. After submitting your application, the Treasury Department (or its "partner financial firm") will contact you to initiate the authentication process. The formal review is expected to commence after tax season closes.
Remember, tax treatment depends on individual circumstances and may change. Consult a qualified tax advisor before making investment decisions. You may also want to visit https://trumpaccounts.gov/ for updates.
Source: kiplinger.com
Credit and Consumer Finance
Three Lesser-Known Ways to Put Your Tax Refund to Work
If you're expecting a tax refund soon, you may have already decided to transfer it to savings or pay outstanding debts. While these two strategies are popular, there are other ways to use your refund wisely.
1. Move it to your emergency fund.
This fund helps you cover unexpected expenses such as a major home or auto repair. So, if your home's heating or car's transmission stops working, you'll be able to handle this without relying on credit. It can also help you manage in the event of a job loss. Ideally, this fund should provide enough to cover three to six months of essential expenses.
2. Fund future medical or dental expenses.
If you or a family member has scheduled elective surgery or major dental work for 2026, a tax refund can help you prepare. If you've qualified for a health savings account (HSA), you may want to consider depositing your refund here, as it allows you to put pre-tax funds aside to pay for qualified medical expenses. Or you may opt to put these funds into a personal savings account.
3. Jumpstart your savings for a major purchase.
Planning to buy a new home, or renovate your existing one? Is it time to take that vacation you've been dreaming about? Your tax refund can help make these happen. However, where you store your refund is important, depending on when you plan to withdraw the funds. Consider whether a high-yield savings or money market account, or a Certificate of Deposit (CD) is your best option. The longer the time horizon, the more options for potentially earning a return on the money you put aside.
Source: ameriprise.com
Did You Know?
Pet Care Costs Climbing Faster Than Childcare Costs
No matter who's part of your family — children, pets or both — the costs of caring for them are rising. But did you know that day care prices for pets are catching up with some forms of childcare? For example, if your dog is in day care five days a week, you may be paying $150 to $300 a week. Day care for infants averages out to $320 to $345 a week.
While you probably won't have to pay for your cat's wedding or braces for your dog's teeth, the costs of caring for them have climbed steadily for the past five years. Since 2020, pet services prices have increased 34.6%, compared with a 25.8% rise in childcare prices, according to the Consumer Price Index (CPI). That's roughly 1.4 times the growth rate.
Generation Z and Millennial pet owners are some of the biggest contributors to this trend, as 42% of them say they prefer pets to children. But most consider providing food and shelter as minimal care. Services such as boarding, walking, training, veterinary care, and grooming are also important for their pets' physical and mental health.
Lastly, there's a positive side to pet ownership you may not have considered. More than 35% of Americans say that their pets motivate them to work harder and find better-paying jobs. So the next time you see an office sign that describes its owner as working hard so their pet can have a better life...they're probably not kidding.
Source: empower.com
