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mortgage

Wednesday’s need-to-know money news

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Today’s top story: How to maximize paying taxes with a credit card for points. Also in the news: How travel is back, 5 reasons to be optimistic about your summer travel plans, and how rising fed interest rates affect home buyers, homeowners.

How to Maximize Paying Taxes with a Credit Card for Points
You can rack up some serious points by paying your taxes with a credit card — just be conscious of fees.

Travel Is Back, in Case You Missed It
The pandemic has changed the way we travel, but the industry is bouncing back.

5 Reasons to Be Optimistic About Your Summer Travel Plans
The gradual travel bounce-back from deep COVID looks poised to accelerate this summer.

How Rising Fed Interest Rates Affect Home Buyers, Homeowners
Interest rates on mortgages and home equity lines of credit may rise following the Federal Reserve’s rate increase.

Monday’s need-to-know money news

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Today’s top story: Mortgage Outlook in March. Also in the news: Balancing Hopes, Dreams and a Low-Paying College Major, Smart Money podcast on the tax, and how to safely tap home equity in a financial emergency.

Mortgage Outlook: Rates Could Keep Climbing in March
Mortgage rates are more likely to go up than go down in March.

Balancing Hopes, Dreams and a Low-Paying College Major
Liberal arts grads face longer odds compared with science, technology, engineering and mathematics degrees, but a well-chosen humanities major doesn’t have to be a vow of poverty.

Smart Money Podcast: The Tax Episode
Sean and Liz discuss deductions, credits and how to know when to call in a tax pro.

How to Safely Tap Home Equity in a Financial Emergency
Understand the costs and risks of borrowing against your home equity before tapping into it.

Q&A: Mortgage payoff creates options

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Dear Liz: My wife and I just paid off our mortgage. What’s the correct thing to do now with the amount we used for the mortgage payments?

Answer: Congratulations! Paying off a mortgage is a big deal, so consider using some of your freed-up money to celebrate in whatever way seems appropriate.

Many Americans don’t have adequate retirement or emergency savings, so those should be high priorities along with paying off any other debt you might have.

If you’re in good shape, though, consider boosting your charitable contributions. Studies show that generosity contributes to happiness, and spending money on others often makes us feel better than spending on ourselves.

Wednesday’s need-to-know money news

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Today’s top story:  Harsh vibe continues for home buyers in 2022. Also in the news: Important lessons from Mortgage application data, new for Medicare in 2022, 5 mistakes that can lead to a bad car loan, and TV Black Friday 2021 deals.

The Property Line: Harsh Vibe Continues for Home Buyers in 2022
Signs point toward a friendlier market for buyers in 2022, if only marginally so.

Why Might Your Mortgage App Fail? Learn From 2020’s Denials
Mortgage application data from years past can teach important lessons.

What’s New for Medicare in 2022?
Costs are going up for Original Medicare, including a big increase for Medicare Part B.

5 Mistakes That Can Lead to a Bad Car Loan
Extending the loan’s term and not shopping for a loan are among the common mistakes that can lead to a bad car loan.

TV Black Friday 2021 Deals: Are They Worth It?
Amazon has a 50-inch Fire TV for $329.99.

Q&A: When mortgage shopping, does checking your credit scores lower them?

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Dear Liz: We’re trying to refinance a mortgage. All of the mortgage lenders claim that checking our credit scores will not affect the scores. However, that is not true. What gives? The three credit bureaus all list “too many inquiries” and penalize us. Does calling them do any good or make it even worse?

Answer: Checking your own scores is considered a soft inquiry that has no effect on your scores. When a lender checks your scores, there can be a small ding, but credit scoring formulas also have a feature that reduces the effect when you’re shopping for a mortgage.

Essentially, all the mortgage inquiries made within a certain amount of time are grouped together and counted as one. In addition, the formulas ignore any mortgage inquiries made within the previous 30 days. The amount of time you can shop varies with the credit scoring formula, so it’s generally a good idea to concentrate your shopping into a two-week period.

What you don’t want to do when you’re in the market for a mortgage is to apply for other credit. Those inquiries are not grouped with your mortgage inquiries. The effect of these inquiries fades quickly and is usually pretty small — typically 5 points or less for FICO scores, for example. But even a small ding could cause you to pay more in interest if your scores aren’t already excellent.

Q&A: Refinance or use IRA funds on mortgage?

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Dear Liz: I owe $360,000 on my mortgage. I have sufficient funds in my IRA to pay this amount off without depleting income distribution for the next 20 years. I am currently paying $1,100 monthly on an interest-only loan, but I have to start making much larger principal payments in November 2022. Would you advise withdrawing IRA investment monies (and taking a tax hit) to pay off the full loan amount, or simply getting a conventional mortgage and live with a higher payment ($1,500) each month? I am 77 and retired now for four years.

Answer: Making that large a withdrawal will almost certainly hurl you into a much higher tax bracket and increase your Medicare premiums. Refinancing the mortgage while rates are low likely makes the most sense, but consult a tax pro or a fee-only financial advisor before making any big moves with retirement funds.