Good Morning! We hope you had a wonderful Thanksgiving from us to you! As we travel through the season of giving thanks, we're focusing on smart financial strategies that give you something to be truly grateful for. This month, we're exploring how to leverage your home's equity and why the Adjustable Rate Mortgage (ARM) is one of the most strategic loans in today's market.
This Month’s quote: "The best way to predict the future is to create it." — Peter Drucker
What’s The Rate?
Average rates for primary homes with % changes according to Freddie Mac
Top Mortgage News
Trump Proposes 50-Year Mortgage Plan (ABC)
Foreclosures Are Up But Experts Aren’t Concerned (Bankrate)
Fannie Mae Drops Minimum FICO Score Requirement (NAMU)
December 24: Best Day of the Year to Buy a Home? (NMP)
Sellers Outnumbering Buyers By 37% (NMP)
(Articles are not endorsed in any matter by Agave Home Loans)
Performance Stats
$46,833,031 Total Funded Volume in October
202 Families helped close on a loan!
Why an Adjustable Rate Mortgage (ARM) Might Be Your Smartest Move
In a market where every fraction of a percent matters, the Adjustable Rate Mortgage (ARM) has emerged as a powerful, strategic tool for savvy homebuyers. While ARMs have historically carried a reputation for risk, today's products are structured to offer a significant advantage: the lowest available interest rates, right now.
The goal of a modern ARM is simple: to give you a lower monthly payment for the first 5, 7, or 10 years of your loan. This initial period, known as the fixed-rate term, is where you lock in a rate that is often substantially lower than a traditional 30-year fixed mortgage.
Why Consider an ARM in Today's Market?
This strategy is particularly compelling in the current economic climate, where rates are expected to drop. It allows you to "bridge the gap" to a better financial future.
Immediate Affordability: The lower initial rate translates directly into a smaller monthly payment, significantly improving your buying power and making homeownership more accessible today.
The Refinance Strategy: The most common plan is to use the ARM's low initial rate for the first few years, and then refinance into a lower, long-term fixed rate once the market rates have dropped as predicted. You get the benefit of a low payment now, with the expectation of locking in a great rate later.
Built-in Protection: Today's ARMs come with clear caps on how much the rate can adjust, both annually and over the life of the loan. This provides a crucial safety net, ensuring your payment won't skyrocket unexpectedly.
Is an ARM the Right Move for You?
An ARM is an ideal choice if you plan to sell or refinance before the initial fixed-rate period ends. It's a strategic, short-term financial tool that gives you the best of both worlds: a low payment today and the flexibility to secure a lower fixed rate tomorrow. If you're looking to maximize your purchasing power and are confident in the market's direction, let's discuss how an ARM can fit into your overall financial strategy.
Using a Home Equity Loan to Consolidate Debt
If you've built up significant equity in your home, a Home Equity Loan (HEL) is one of the most straightforward and powerful ways to put that value to work. Unlike a revolving line of credit, a HEL provides you with a single, predictable lump sum of cash, making it the ideal tool for major, one-time expenses.
The goal is simple: to provide you with the funds you need for large projects or financial goals with the stability of a fixed rate.
Top Reasons to Consider a Home Equity Loan:
Predictable Payments: A HEL offers a fixed interest rate and a set repayment schedule. This means your monthly payment will never change, giving you complete peace of mind and making budgeting simple.
Lump Sum Funding: You receive all the funds at closing, which is perfect for major expenses like a full kitchen renovation, paying for college tuition, or consolidating high-interest debt into one lower-rate payment.
Lower Interest Than Credit Cards: Because the loan is secured by your home, the interest rate is typically much lower than what you would pay on credit cards or unsecured personal loans.
A Home Equity Loan is a smart financial move for homeowners who need a specific amount of money and value the stability of a fixed rate and predictable monthly payments.
Sweet Visuals: December Fed Rate Drop Prediction
Fed Rate Prediction for December Meeting: 86.9%% chance rate cut of another 0.25%
Source: FedWatch
Fear and Greed Index
Note: Extreme fear usually corresponds with investors moving their money into safer assets like U.S. Treasury bonds. This increases bond prices and decreases yields.
When yields fall during fearful periods, mortgage rates often drop as well.
Source: CNN
Sticky Media: Your Money Or Your Life by Vicki R. and Joe D.
After all the talk about strategic ARMs and Home Equity Loans, let's talk about the real goal: getting your time back. This classic book is a must-read because it flips the script on how you think about money. It asks a simple, powerful question: Are you happy with how much of your life you're trading for your paycheck?
The book gives you a practical, nine-step plan to figure out your "real hourly wage" and start making money decisions that buy you more freedom, not just more stuff. It’s all about being intentional with your spending and saving so you can hit financial independence sooner. It’s the perfect, cozy read for the holiday season to help you reset your money mindset for the new year!
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