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Sean Pyle: Welcome to the NerdWallet SmartMoney Podcast, where we answer your questions about personal finance and help you feel a little smarter in what you do with your money. Gathered by your master, Sean Piles.

Liz Weston: And introduced another of your hosts, Liz Weston. As always, be sure to send your money with questions, call or send us a phone call to the hotline “nerd” at 901-730-6373 to 901-730-NERD. Or email us at [email protected]

Sean: And while watching it, please rate, review and subscribe when you find this podcast. In this episode we are going to talk to our resident of the house while buying a pro Holden Lewis about whether mortgage refinancing home improvement projects will be improved. – and if it’s still a good time to refinance. But first in the “This week in your money” segment, Liz and I will discuss interesting information about how people manage their finances as a result of a global pandemic.

Liz: NerdWallet commissioned a survey in Harris for more than 2,000 adults. And we found some interesting things. First, our revenues really took a hit. Close to seven out of ten Americans say COVID-19 has negatively impacted their income, including 80% of each millennium and Gen Zs.

Sean: Another thing we found out is that many people worry about buying a home. About three-quarters of Americans say they are [would] there are problems about buying a new home in 2020 due to the pandemic. Another major problem is the ability to safely visit potential homes followed by the opportunity to sell their current home.

Liz: Finally, three-quarters of Americans plan to take financial action after a pandemic ends, such as saving more money in an emergency fund or spending less on ignorance.

Sean: It all looks perfectly in line with trends that have surfaced online, and conversations that have been shared with friends and family across the country, especially with income. I know so many people who are almost completely out of work trying to find new sources of income. And he had really tough conversations with friends who said, “Hey, I really didn’t know what to do because they didn’t do so much. And guess what? It would take six or eight weeks until my unemployment check came.” “So it really fits the house. And I wish I had the best answer for people because we just can’t say, “Oh yeah, go and go to the side. Concert.” We know that’s a really possible option for a lot of people. And what do you advise people, Liz?

Liz: Well, the four most unnecessary words in English are “I told you that” and unfortunately I see a lot on social media and elsewhere, people say, “Well, you had to be an ambulance fund”. There are reasons why most people live from paycheck to paycheck. Accompanied by a structural thing. I mean, revenue doesn’t lag behind spending. All sorts of things happen. The fact that people have an emergency fund that will last them a long time, how long it will take, should come as a big surprise. I hope people will keep in mind that we understand how long this will last. And it is only natural and humane to be optimistic and hope that the economy will just come back to life. But in reality these are past recessions that occur during the game. So I think a smarter course, and maybe a more conservative one, is just to expect it to last for a while, however it plays off your financial situation.

Sean: That’s right. I mean, it’s interesting that while people are getting a hit on their income, people are still trying to do other things like, as we’ve seen, trying to buy a home, which really surprised me. I originally planned to start the process of buying a home by the end of this year. And now I am partly detained, because, as we found out, 34% of people are worried that they will be able to stay at home. And I totally get into this camp. I really like the idea of ​​going into someone else’s house now without knowing what people are doing. And me too, because we still know how it’s going to play out. I also just want to save and keep the money I have just in case, because think about how things have changed in the last two, three weeks. We learned what the following will look like. So in times of great uncertainty, being much more conservative.

Liz: Well, I am given advice that is well served in previous times of uncertainty, which should not try to hold any market, be it the stock market or the real estate market, the best time to buy a home if you can afford it and if you can stay on for a while. It may take you five years or more to estimate the cost of buying and selling. So all that arises is this: if you want to do it for yourself and you feel like you are able to do it, I really have to put those plans on indefinitely. If you want to wait to get into a better financial position, it makes perfect sense to me.

Sean: Yes, but at the same time, there was actually a better time to stay a tenant if you want to do it, and it’s not so true and in a great place to buy a home. Berkeley has friends, friends in New York who have seen rental prices go down. So at the same time, yes, maybe you want to buy a house, but also maybe you could save some more money right now by getting a less expensive rent and collecting more down payment.

Liz: Instead of creating more families, they consolidated households. People move together, people go home to stay with their parents. So it makes sense that the rental market will be better. And it actually brings a lot of benefits to renting, especially if you know where to go in a couple of years. Rent does not throw away money. Lying buys freedom. You can collect and rent as soon as the lease is over.

Sean: Bad things all depend on your personal priorities and where you want to put your money. This pushes me to other information that we have raised that were the plans after the pandemic. Three-quarters of Americans plan to take financial action after the pandemic ends to save more and spend less money on living. First of all, I wonder what the plans of our listeners are. So I want to put out the audience, if you have any interesting plans after the pandemic, please let us know, send an email to [email protected] and share what you think you might want to do after the pandemic financially. Really wondering about it, but still trying to figure it out for myself because I had this thought in my head, “Oh yeah, keep looking for a house. And my partner and I were going to start renting the one we lived in now . ”And now we’re somehow thinking about finding a home in the country, somewhere in Oregon, getting a big plot of land and making it. a small cooperative or something. I don’t know. Maybe I will survive. But has the pandemic changed any of your plans, Liz?

Liz: Well, I was a bit of a preparer. I have to admit this and – not that I have a bunker, I don’t – but we’ve taken a slack out of a lot of systems. You know that at one time, when food was delivered before the sale to people in grocery stores. We’ve seen how these supply chains can break down and how much they can annoy people who have grown up, always able to get whatever they want. And then Amazon comes on stage and you will not only be able to get everything you want, you will be able to deliver it the same day to your porch. We got used to the fact that there is a system where we could get everything we wanted.

One of the most important buyers for me of all this is that you need to make a small weakness in your personal economy, even if it means having an emergency fund that you can eat – at least a couple of weeks of food stored in your home. pantry and managing it, or having money in the bank to get you in order – we usually recommend people have a children’s or start-up fund of $ 250, $ 500, $ 1,000. But over time you want to create something bigger because periods of unemployment can happen to anyone.

Sean: That’s right. For me, it was a lot about how I can increase my independence by saving, improving the place where you live now, and doing what I feel safe here, whatever that means.

Liz: And your little garden wins. Part of that is Persec too.

Sean: Loves loving your garden. Tomatoes are good. So fingers crossed. But speaking of homes and gardens, lately a lot of people are investing more time and money in their homes, leading to money for this episode that comes from Sarah. Liz, please read Sarah’s question?

Liz: She says: “My husband and I have been running a lot of home improvement projects over the last few months as they took shelter and thought about refinancing. So my question is twofold. Will home improvement projects help me get a better refinancing deal? And it’s still a good time for refinancing? “

Sean: A very interesting question. Did a lot of things around the house too. My partner and I planted a brand new garden. And I was even thinking of linking it to our refi deal we just finished. So I’m looking forward to the answer to that.

Liz: Yes, I do too.

Sean: Good. Well, to help us answer Sarah’s question in this episode of Liz’s NerdWallet SmartMoney Podcast, and I’m talking about our purchase of Holden Lewis ’home about whether all of these home improvement projects can help you make the best refinancing deal. And if there is good time for refinancing.

Liz: Get to that soon.

Sean: Hey Holden, welcome to the show. So glad what awaits you.

Holden: Hey, thanks, guys. Always always fun.

Liz: So Holden, our listener Sarah, has two questions for you. First, she wants to know if her recent home improvement projects will help refinance. And if it’s even a good time to refinance your mortgage. What do you say about the first question?

Holden: One thing I want to somehow get out of the way is that, as an HGTV viewer, shows like “Love It or List It” are a little misleading, and they make you believe that if you pay, say $ 40,000. on renovations that will increase the cost of the home by $ 50,000. It just won’t happen. You are already going to spend more than you are going to pay back by increasing the cost of the house. But I mean, that’s not the reason you’re doing renovations because you want to enjoy your home.

Liz: Yes. Worse than a thing of consumption than a thing of investment. And I think that what is shown on home improvement really silences or creates the wrong impression. Most home improvement projects just make a profit. And some of them even make financial sense, right?

Holden: That said, you’re adding a second story to a house where all the other houses in the neighborhood are one story. You came to spend money. You didn’t get much value from this story. In this case, it’s best if you want a two-story house to sell your one-story house in a one-story neighborhood and go find a two-story house somewhere else.

Sean: I have to say I feel misled because I also love “Love or List,” and all these shows, and you see a count of how much they’ll be coming back based on what they’ve been doing. I thought it worked that way.I thought it was a pretty straightforward exchange.Therefore, first of all, thank you for debunking this, but I wonder if there is an easy little house improvement in the house that you can make will make your home They say a bucket of paint at 50 bucks will probably make your home like $ 50,000 more valuable.

Holden: You can do a few small things that will really have a negative impact compared to the money you spend on it. One is just landscaping, planting flower beds. Maybe if you’re really tired of the shrub, plant a new shrub, make pruned trees. This can actually give your home more value than you spend on it because it greatly increases the attraction. And then inside the house, yes, Sean, you mentioned paint; Man, paint pays off well by investing in painting walls as well as refreshing floors. If you wore a rug, rip it out and replace it with something else. These kinds of repairs, they can really get you most, or even a little more, than you spend on them, and confused, man, just run away, get rid of your stuff if you have to put it in storage.

Sean: But in terms of refinancing I wonder how these improvements can be related to this. Is that in the assessment someone will say, “Hey, beautiful flowers. I’m going to give you a big amount on your refi.” Or how does it work?

Holden: For a lot of refinancing they are going to want to evaluate the home. And if you’ve done renovations that will improve housing, it’s likely to increase the value of your home. And the good thing came when they ate refinancing.

Liz: We conducted a detailed assessment of our last refinancing and did so for the first time. But if something is dealing with, you may want to contact and get a more thorough assessment. If you want these home improvements to be included.

Holden: Bad. When a lender says, “Yeah, we don’t need to do an appraisal or just do a ride and someone will look out the window. You can always ask, ‘Hey, can you do anything?’ “more perfect?” And look what they say. I want to add one more thing. FHA and VA loans, they are called refinancing streamlining. The main reason for an orderly process is that they do not require certifications. So having a refinancing from one FHA loan to another or one VA loan to another, and if you apply streamlining, you should get it [an appraisal]. Well, if in a situation like that you can always say, “Hey, you know what? I wanted to tidy up. I want the new value of my house after renovation to be appreciated.”

Liz: And anything the update should also keep in mind because it’s come up with our last couple of clarifications that need to be done in the projects. They ask about it. They want to have an unfinished project because it actually reduces the cost of your home, not increases it, right?

Holden: That’s right. They just want to make sure they are finished and that the house is inhabited. They want unfinished work to just linger there when they give you a new home loan.

Liz: Yes. Something for all those who do it themselves, you need to remember. No dangling wires.

Sean: Well, Holden, I want to move on to the second part of Sarah’s question, is it still a good time to refinance a mortgage or has this window already passed?

Holden: This is a great time to refinance because mortgage rates are mostly at historic lows and they were all April, all May passed to June, really very low. You can get a 15-year mortgage worth 2.5% to 3%. You can get a 30-year refinancing of about 3%, and maybe a little less, and maybe a little more. These are excellent interest rates for refinancing. And that’s a lot of people.

Liz: I remember that when rates really started to go down, there was such a rush of bids that lenders were really trying to discourage people from refinancing. Is it still so?

Holden: Bad things don’t happen anymore. And yes, it happened in February and March, when interest rates fell so fast that lenders had more refinancing applications than they could handle. And so they did different things. The main thing they did was not to reduce rates by as much as they could, but simply to fight off the horde of refinancers. But when they processed this big lump down the pipeline, they processed them. And so lenders accept refinancing applications and everything should go pretty smoothly. I thought that meant there was a lot of delay. However, it should be remembered that refinancing applications are strong, but it is a purchase. This may shock many people, but buying a home is happening at a fairly rapid pace, especially with new homes. And yes, a mortgage lender that handles a lot of mortgage applications. Yes, yes, it may take a little longer than usual, or it may not process your loan, it actually depends on the lender.

Liz: And also heard that lenders are getting tougher, right?

Holden: Lenders are definitely getting tougher. One of the things that is very strict about credit score. Ideally when refinancing you have a credit score of 740 and above. I mean, they will refinance a credit score lower than this, but are looking for applicants with a high credit score. They went really reluctant to borrow more than 80% of the value of the house. So you said you had a house worth $ 100,000. They just want to refinance the house for more than $ 80,000. Just keep that in mind.

Sean: I want to talk about some of the pros and cons of refinancing. Я маю на ўвазе, відавочна, плюсы, вы можаце атрымаць меншую штомесячную аплату, але якія яшчэ вы бачыце, чаго людзі не могуць чакаць? У чым жа мінусы гэтага?

Холдэн: Ну, плюсы, зразумела, як вы ўжо згадвалі, зарабляеце меншым штомесячным плацяжом, атрымліваеце рэальную прычоску, але вы таксама можаце знізіць іпатэчнае страхаванне пры зніжэнні працэнтнай стаўкі. У вас можа быць крэдыт FHA, калі вы пазбавіцеся ад іпатэчнага страхавання без рэфінансавання. Так што вы сказалі, што ў вас ёсць крэдыт FHA. У вас ёсць больш за 20% капіталу. Ну, вы можаце рэфінансаваць больш нізкую стаўку і пазбавіцца ад страхавання іпатэкі. Вы можаце перайсці з ARM на крэдыт з фіксаванай стаўкай. Калі вы думаеце, што будзеце заставацца дома на працягу вельмі доўгага перыяду часу, альбо вы можаце замяніць 30-гадовую іпатэку, скажам, на 15-гадовую пазыку яшчэ больш нізкай працэнтнай стаўкай, якая павысіла б ваш штомесячны плацеж. , але ў выніку меншыя працэнты выплачваюцца з цягам часу. Што тычыцца мінусаў, я проста падумаў, што было б добра выкарыстоўваць 30-гадовую іпатэку для рэфінансавання пазыкі, якую вы мелі больш за пяць гадоў.

Так што вы сказалі, што ў вас ёсць 30-гадовая пазыка, вы маеце яе сем гадоў. У вас засталося 23 гады. Я неахвотна распавядаю людзям, так, рэфінансаваць прама ў іншы 30-гадовы пазыку і пачаць усё з гэтага 30 гадоў, таму што вы ў канчатковым выніку плаціце значна больш працэнтаў па тэрміне пазыкі, хаця ваш штомесячныя плацяжы будуць ніжэйшымі.

Ліз: Я разумею, што. Я прымаю нейкую супрацьлеглую кропку гледжання, якая заключаецца ў тым, што гэта сапраўды можа дапамагчы зрабіць максімальна нізкую штомесячную аплату ў выпадку, калі нешта пойдзе не так. Пацярпела сусветная пандэмія, бесперапыннае беспрацоўе. Дарэчы, устала ад гэтага слова беспрэцэдэнтнае. Але выявілася праўда. Мы пачалі ведаць, што адбудзецца.

Холдэн: Усё беспрэцэдэнтна.

Ліз: Усё беспрэцэдэнтна, так, таму ўсё дзіўна. Усё беспрэцэдэнтна. Вы можаце мець меншы штомесячны плацеж. Тое, што можа быць альтэрнатывай, і я разумею, вы не хочаце назаўсёды запазычанасць, вы не хочаце мець іпатэку на пенсію, асабліва – для большасці людзей гэта вельмі дрэнная ідэя – але, магчыма, атрымаеце 30 -гадовая іпатэка, але пагасіць яе, калі гэта была кароткая пазыка? Такім чынам, вы маеце гнуткасць больш нізкай аплаты, калі вам прыйдзецца страціць працу, але ў вас таксама ёсць магчымасць хутчэй выйсці з даўгоў. Што вы думаеце пра гэта, Холдэн?

Холдэн: Я думаю, што гэта быў сапраўды выдатны момант. Я маю на ўвазе, мы кажам, што вы хочаце пагасіць гэтую іпатэку праз 15 гадоў. Ну, вы маглі б атрымаць 15-гадовую пазыку на рэфінансаванне ў вельмі нізкую працэнтную стаўку. Персек выдатны. Але, як вы ўжо адзначылі ў гэты момант, вы замыкаліся на тым, каб зрабіць штомесячныя плацяжы, якія даволі высокія. І так, так, вы можаце рэфінансаваць 30-гадовую іпатэку, і тады вы можаце спытаць у крэдытора: “Гэй, якія былі б мае выплаты, калі я заплаціў бы гэта за 23 гады замест 30?”, А потым, калі вы можаце дазволіць сабе гэта, зрабіце тыя выплаты. Але ў часы, якія аказваюцца менш чым у дастатковай ступені, адкіньцеся на мінімальныя плацяжы па 30-гадовай пазыцы. Так, так, атрыманне 30-гадовай пазыкі можа даць вам такую ​​гнуткасць.

Шон: Ну, здаецца, адказ на пытанні Сары адзін, праекты па добраўпарадкаванні дома, напэўна, паляпшаюць усё, што мае значэнне з пункту гледжання рэфі-здзелкі. Але менавіта зараз – выдатны час для абнаўлення, калі вы атрымаеце права. Але пераканайцеся, што ў вас атрымаецца здзелка падыходзіць менавіта вам, каб вы маглі быць стабільнымі ў доўгатэрміновай перспектыве. Добра, добра, зараз мы разгледзім нашы парады па вынасе. Па-першае, загартоўваць вашы чаканні. Вашы праекты па добраўпарадкаванні дома, хутчэй за ўсё, палепшаць вашыя шанцы на абнаўленне, але яны могуць дапамагчы вам хоць крыху павялічыць кошт вашага дома.

Ліз: Нумар два, зараз выдатны час для рэфінансавання, калі зможаце. Стандарты па крэдытах высокія, але паказчыкі набліжаюцца да гістарычных мінімумаў.

Шон: Нарэшце, атрымаеце рэфі-здзелку, якая мае сэнс. Вы хочаце назаўжды запазычанасці, але блакіроўка нізкіх выплат можа даць вам большую гнуткасць, калі вы страціце працу альбо маеце іншыя фінансавыя няўдачы. І гэта ўсё, што мы маем для гэтага эпізоду. Ці ёсць у вас грошы з уласным пытаннем? Звярніцеся да Nerds і патэлефануйце ці дашліце нам свае пытанні на нумар 901-730-6373, згаданы 901-730-NERD. Вы таксама можаце звязацца з намі па адрасе [email protected] і наведайце nerdwallet.com/podcasts для атрымання дадатковай інфармацыі аб гэтым эпізодзе, і, калі ласка, падпішыцеся, ацаніце і разгледзьце нас, пакуль вы атрымаеце гэты падкаст.

Ліз: І вось наш кароткі адмову, прадумана распрацаваны юрыдычнай камандай NerdWallet. На вашы пытанні адказваюць дасведчаныя і таленавітыя аўтары фінансаў, але мы не фінансавыя і інвестыцыйныя кансультанты. Гэтая інфармацыя пра Nerdy прадастаўляецца для агульнаадукацыйных і забаўляльных мэтаў і не можа датычыцца вашых канкрэтных абставін.

Шон: І, з улікам сказанага, да наступнага разу звярніцеся да Нердаў.

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