Relocating to a new area can be exciting, but it can also be expensive. There are many resources to help, but most cost money. However, if you take your time and plan carefully, you can reduce the expense so you don’t start your new life with new debt. Here are three tips to controlling your moving budget.
1. Find Out What’s Free
Nothing is better than paying nothing, right? Don’t assume you have to fork out money for everything you need to move. If you have accepted a new job, ask your new employer whether the company can cover any of your moving expenses.
When it comes to moving supplies, see what you can get without having to pay for it. Stock up on free moving supplies by asking your workplace, local grocery stores, and friends and family for unneeded, sturdy boxes. Instead of paying professional movers, see if you can barter with friends or family for help in moving boxes to and from the truck.
2. Focus On Essentials
After you’ve pursued every possible angle to cover your needs for free, you will likely need to pay for something. The trick is to only do so for what is absolutely necessary. Many providers will offer you help along the way, but you should only sign up for basic services. This could include moving big items such as a piano, paying for gas and tolls, or buying cartons for oddly-shaped or particularly valuable items. If you are not able to move things yourself, this could include hiring professionals.
3. Do It Yourself
If you have the time and are physically fit, start long before moving day and pack everything yourself. Rent or borrow a truck and move your boxes yourself, perhaps with the help of a friend. Take care of disconnecting old utilities and signing up for new ones. Handle both cleaning your old home and preparing your new one. Anything you can do with a little elbow grease will mean less money out of pocket.
Call your real estate agent for advice on keeping moving expenses down. Ask about providers who may give you a discount for being referred by your agent. Remember that you are in charge of your move, so don’t automatically sign up for every service available. By using free goods and services when available and doing much of the work yourself, you can set and follow a moving budget you can afford.
The National Association of Home Builders (NAHB) reported that April’s Housing Market Index rose from a reading of 52 in March to 56 for April. This is in line with warmer weather and the peak home buying season in spring and summer. Readings over 50 indicate that more builders view market conditions as positive as those who do not. NAHB members cited lower mortgage rates and better labor market conditions as reasons they expect more home buyers to enter the market.
All Components of Builder Confidence Increase
The NAHB Home Builder Index is calculated from three components. The reading for confidence in current housing market conditions rose from 58 in March to 61 in April. Builder confidence for sales condition in the next six months rose from a reading of 59 to 64, which was the highest reading for 2015 so far.
Home builder confidence in buyer foot traffic moved from 37 to a reading of 41 in April. Lingering winter weather likely kept house hunters indoors in many areas. NAHB Chief Economist David Crowe said that the uptick in the NAHB Housing Market Index indicates that housing market conditions can be expected to improve throughout 2015.
Regional Housing Results Mixed, Fed Beige Book Cites Winter Weather
NAHB measures regional changes in housing markets on a three-month rolling average. April’s results were mixed.
Builder confidence in the southern region increased from 55 to 56 in April. The northwestern region was unchanged from March to April at 42. Builder confidence in Midwestern housing markets fell by two points from 56 to 54. The western region saw builder confidence fall three points from the March reading of 61 to April’s reading of 58.
In an unrelated report, the Federal Reserve also released its Beige Book report which is a collection of anecdotes from business contacts throughout the nation. Winter weather conditions were prominently mentioned in the Beige Book report and were seen as detrimental for housing conditions.
The Beige Book report also mentioned layoffs caused by low oil and gas prices. This could negatively influence housing market conditions in regions where oil and gas provide many jobs and contribute to local economies.
Periodically, many homeowners will receive a rather sizable amount of extra cash. This may be from a bonus from your employer, a refund on your tax return, a financial gift from a relative or something else altogether.
While there are many things that you could do with your windfall, you may be wondering if paying down your mortgage balance is a wise idea. Before you make your decision about how to spend your money, consider what impact your lump sum payment will have on your mortgage.
Reduction in Principal Balance
The most obvious impact a lump sum payment will have on your mortgage is an immediate reduction in your outstanding principal balance. Your regular monthly payments will be applied to both interest and principal, but your lump sum payment will be entirely applied to principal. Therefore, you can expect to see a rather sizable reduction in the outstanding balance, and this will have a direct and positive impact on your home equity.
More Effective Loan Payments
Your required monthly mortgage payments will not be lowered when you make a lump sum payment on your mortgage, and you will still be required to pay the same amount to your lender going forward. However, your interest charges for each month will be adjusted. Your interest will be calculated based on the current loan balance each month. A reduction in outstanding balance lowers the interest charges. This essentially makes your future payments more effective at debt reduction and reduces the amount of interest you will pay over the life of your loan.
A Change to the Final Loan Payment Date
Because each of your loan payments going forward will be more heavily weighted on principal reduction than on interest charges, the fact is that your final loan payment date can be accelerated. Depending on the amount of the lump sum payment that you make toward your mortgage, this may be an acceleration of a single month, several months or even several years in some cases.
Making a lump sum payment on your mortgage can have many positive effects for you. However, this is not the only option available when deciding how to spend or invest your windfall. Compare these benefits against the benefits of other options available to determine your best course of action.
If your home is located in a flood zone, it’s critical that you know how to get ready for those drenching spring rains. Here are some basic steps any homeowner can take to prepare for potentially devastating floods.
Community Emergency Plans
Your community has an emergency plan in case of flooding. There are warning signals to alert residents, evacuation routes mapped out and the locations of emergency shelters are given. Get in touch with your community government center if you haven’t already received copies of these preparedness plans.
Have a Family Plan
Floods can be devastating. In an emergency, it’s key that every family member knows what to do and where to go. Plan an evacuation route with your family and practice it. Be sure everyone has the name, address and phone number of a family contact who lives out of state in case anyone is separated during a flood event.
Get ready to prevent disaster. Turn off all electrical power to the home as soon as there is any standing water or before you vacate it. Also turn off gas and water supplies if you evacuate. Hire an electrician to raise your electrical outlets, circuit breakers and other electrical component so they are at least a foot above the home’s flood elevation mark.
Emergency Supplies to Have on Hand
Being prepared in a flood zone means having emergency supplies available all the time, just in case. Stock your home with supplies that will last at least five full days. Have about five gallons of clean water per person on hand. Stock up on canned foods or other non-perishable food items. Be sure to have a non-electric can opener. Place aside some prescription medications or any other specific medical needs, in addition to a first aid kit. Have a battery-powered radio on hand and extra batteries. Also have a few flashlights at the ready. Sleeping bags or extra blankets are needed, as are personal hygiene supplies like toothbrushes, toothpaste, soap and towels.
Prepare Your Home Well in Advance
Finally, you’ll want to check on a regular basis that your sump pump is in working order and have a battery-powered back up available. Get a water alarm so you’ll know if water is pooling in your basement. Have your gutters and downspouts cleaned out at least twice a year.
Living in a flood zone means that you’ll need to be prepared, and there’s no better time than now to start getting ready.
Last week’s economic news included the minutes from the most recent FOMC meeting, which indicated that the Fed’s monetary policymakers are eyeing a potential increase in the target federal funds rate, but don’t expect to do so immediately.
Members of the Federal Open Market Committee expressed concerns about lagging housing markets and noted that inflation has not yet achieved the Fed’s two percent goal. When the Fed decides to raise its target federal funds rate, which now stands at 0.00 to 0.25 percent, Interest rates and mortgage rates can be expected to rise as well.
Mortgage Rates Lower, Jobless Claims Rise
Freddie Mac reported that mortgage fell last week. The average rate for a 30-year fixed rate mortgage fell by four basis points to 3.66 percent; the average rate for a 15-year mortgage dropped by six basis points to 2.93 percent. The average rate for a 5/1 adjustable rate mortgage was nine basis points lower at 2.83 percent. Discount points were unchanged across the board at 0.60 percent for fixed rate mortgages and 0.50 percent for 5/1 adjustable rate mortgages.
New jobless claims rose to 281,000 against projections of 285,000 new claims and the prior week’s reading of 267,000 new claims. Analysts said that the Easter holiday week affected weekly jobless claims, and that the varied dates of the Easter holiday and spring break weeks for schools can impact weekly readings for new unemployment claims.
The four-week rolling average of jobless claims fell to its lowest reading since June 2000. The four-week rolling average is considered a more dependable source for identifying labor force trends, as it lacks the volatility associated with holidays and one-time events that can cause great variation in weekly readings for new jobless claims.
Next week’s scheduled economic reports include retail sales, retail sales not including the automotive sector, the Federal Reserve’s Beige Book report, which includes anecdotal reports of economic conditions reported to the Fed, and Housing Starts. The usual reports for weekly jobless claims and Freddie Mac’s mortgage rates survey will be released Thursday.
On Friday, the University of Michigan will release its Consumer Sentiment report, which provides indications of how American consumers view current economic conditions. While general in scope, consumer sentiment can suggest how consumers view buying homes.
A lack of positive sentiment about the economy in general and jobs in particular suggests that fewer Americans may be ready to buy homes. Increasing positive sentiment indicates less concern about economic conditions and could point to more Americans entering the housing market as the peak home- buying season gets underway.