Current Situation: A Mortgage Guy’s Top 5 Takeaways
Like many of you, I have taken time to reflect during these very unusual circumstances. This has given me the opportunity to see a few things more clearly. Specifically, these financial lessons that have been reinforced by recent events:
We cannot tell what tomorrow will bring.
The stock, bond and mortgage markets have all been quite unpredictable. Each day mortgage rates are fluctuating, not by the hour, but by the minute. Here’s the good news: rates are still historically low. If you’re currently in the process of buying or refinancing and are satisfied with what your monthly payment will be, lock in your rate!
Diversify your investment and retirement accounts.
During volatile times, we often forget that our investments and retirement accounts are for the long term. Remember, at the end of any rolling 10-year period in its history, the stock market has always been higher. Instead of panicking, it’s a great time to review your investments with a professional to get proper guidance.
Research other sources of income.
In times like these, when we see friends and family temporarily out of work, we realize we may not be able to depend solely on one job. Other income streams can ease the financial impact if you find yourself unemployed. Some of the most common are rental income, side businesses, dividend income, a second job or even selling items online. Consider other options for yourself.
Don’t dig yourself into a deep credit hole.
Now that we’re experiencing unpredictability, it’s even more important to focus on setting up an emergency fund. Most mortgage lenders recommend having 3 months of expenses saved up. If this feels too steep and unattainable, start with 1 month of expenses and take it from there.
Last, but certainly not least, be ever so grateful to have a home.
Right now, our homes are sheltering us in a world full of unknowns. We’ve heard it before, but this too shall pass, and we will get back to our busy and exciting lives once again. In the meantime, hang tight, stay positive and remember how lucky we are to have a place to call home!