Archive | February, 2016

Pay Yourself First

23 Feb

The principle to pay yourself first has been referred to as the Golden Rule of Personal Finance.

The concept is that one of the first checks you write each month is for your own savings. The rationale is that if there is no money left after a person pays their bills, there is nothing to contribute to savings or investments that month. pay yourself first - check -300.png

By establishing a priority to save, a person realizes that the balance of their monthly income must cover living expenses and other discretionary spending. This is a much different strategy than saving what is left over from monthly expenses and other spending.

Many financial experts have likened an amortizing mortgage to a forced savings account because a portion of each payment is applied to the reduction of the principal amount owed. Some homeowners have taken that concept further with a shorter term mortgage to build equity faster.

In the example below, a $250,000 mortgage at 4% interest is compared with two different terms. The 30 year mortgage would have payments of $1,193.54 each month with the first payment having $360.20 being applied to the principal. Each payment would have an increasingly larger amount applied to the principal.

The 15 year mortgage would have payments of $1,849.22 each month with the first payment having $1,015.89 being applied to the principal. The $665.68 difference in payments goes toward reducing the loan amount and acts like a forced savings.

A homeowner might opt for the longer term and intend to put the difference in the two payments in a bank savings account each month or make an additional principal contribution to pay the mortgage down. However, as any person responsible for paying household bills knows, there will always be something that comes up that could hijack your intentions.

By committing to the shorter term mortgage, a borrower is committing to make the higher payment each month and the benefit is that it will reduce your principal balance faster.

pay yourself first.png

Updated Home in Prime Frisco Location!

20 Feb


8108 Ship Street, Frisco
3 Bedroom / 2 Bath / Hardwood Floors

Updated home in prime Frisco location! Updates include: hand-scraped hardwood flooring, granite counter tops, fence, lighting fixtures, gutters, landscaping, garage ladder, roof, cabinet stain, paint and tile flooring. Split bedroom plan. Master bedroom has desk area. Comer tub with separate shower. Transom and arched windows.

You don’t want to miss this opportunity!  MLS 13321275

For more information and photos on this home, click here.

Please contact George Jacobs at 214-385-8951 for more information.

For more information and other homes for sale in this area, check out 

Homeowner Advisory

16 Feb

Similar to an annual wellness physical, homeowners should consider an annual review of the financial elements of their home. It’s particularly valuable based on the fact that their home and its equity is generally, one of their largest assets. Info You Need.png

  • List of similar properties recently sold and currently available
  • Information on challenging property tax assessment
  • Refinance Analysis to:
    • lower your rate
    • shorten the term
    • make improvements
    • eliminate mortgage insurance
    • remove a person from the loan
    • eliminate credit card debt
    • combine loans
    • take cash out of the equity
  • Equity Accelerator to retire the mortgage within a specific period of time
  • Repairmen and contractors recommendations
  • Information on rental property opportunities

We’d be happy to provide this information at no obligation as part of our on-going commitment to providing homeowner information, both in general and specifically, to our contacts. It is part of a long-term strategy whereby we hope to earn your loyalty and referrals when you do need our services to buy or sell.

Gorgeous Home With Game Room & Pool!

15 Feb


6379 Kiest Forest Drive, Frisco
5 Bedroom / 4 Bath / Media / Game / Pool

This breathtaking Landstar home in sought-after Hunters Creek has a stunning backyard oasis, versatile floorplan, and is just down the street from Taychas Trail. Mature landscaping, stone accents, an upgraded copper roof and front porch enhance the curb appeal. Upon entry, you will be greeted by tile flooring with slate insets, an elegant formal dining with double-crown molding and a formal living, currently being used as study. The kitchen would delight any chef with its granite butler’s pantry, serving island, upgraded 42” cabinetry with dentil moldings, gas cooktop, walk-in pantry, double ovens, large breakfast area and updated Maytag dish-washer (‘14) and is open to the family room with soaring 20” ceilings, fireplace with gas logs & double mantle, custom-built in entertainment center, upstairs catwalk and pool view.

The master retreat is split from the other bedroom, also enjoys a pool view and has a large master bath with jetted tub, dual stain-grade vanities, and two spacious closets. Outdoors is the ultimate retreat to unwind with a covered arbor with stamped concrete deck (’07), upgraded landscape, salt-water pool with pebble tec surfacing & flagstone coping (’05), 8-foot Board on Board privacy fence with sliding gate (’05), ceiling fans, two side yards and spa with waterfall. Fence and arbor were re-stained in 2015.

Upstairs is a large gameroom and a media room with surround sound wiring, a private guest suite with a full bath and two large bedrooms with a jack and jill bath. This home also includes an additional split bedroom downstairs with a full bath that could be a study for additional guest suite. Other upgrade/features are….8’ solid-core doors and 6” baseboards downstairs, tankless water heating system (‘13), updated condensing unit (‘14), storage above garage, custom stair spindles, exterior paint & front door (‘15), roof replaced (’15) & more. This home is within walking distance of 3 outstanding Frisco schools & Hunters Creek has unbeatable amenities to include two scenic pool areas, beautiful Taychas Trail along the creek and community events. Priced to sell!!

You don’t want to miss this opportunity!  MLS 13318276

For more information and photos on this home, click here.

Please contact Jeff Jacobs at 972-978-6539 for more information.

For more information and other homes for sale in this area, check out 

It’s a Big Difference

9 Feb

Let’s say that you just won $8,750 on a lottery scratch-off ticket. You’ve decided to be frugal and invest the money and have decided on three alternatives: buying a certificate of deposit, a mutual fund or use the money as a down payment for a $250,000 home.

To compare the three alternatives, let’s look at the equity in each one three years from now.Your best investment graphic.png

The certificate of deposit can be invested at 1.3% in today’s market and you believe you can reasonably earn 5% on a mutual fund. You expect the home to appreciate at three percent a year.

The certificate of deposit would be worth $9,096 at the end of three years and the mutual fund would be worth $10,129. However, the equity in the home at the end of three years would be $45,204. That is a four time’s higher yield on the home.

One of the main reasons for the big difference is that the buyer benefits from leverage: the use of borrowed funds to increase the results. The $8,750 down payment is controlling a $250,000 investment. The appreciation is determined by the price and not merely by the cash invested. Another factor is that the loan balance is smaller at the end of five years than originally borrowed due to amortization.

There are certainly other factors to consider such as maintenance and other expenses but when the financial benefits are as strong as they are, it certainly deserves a much closer investigation. One of the first things to consider is whether the borrower can qualify for a mortgage and the only satisfactory way to be certain is to get pre-approved by a trusted mortgage professional.

Use the Your Best Investment calculator to make your own projections.

Is Understanding Costing You Money?

2 Feb

People tend to fear what they don’t understand. Homeowners understand fixed rate mortgages and remember the horror stories of people who lost their homes because they could no longer afford them when their adjustable rate mortgages went up.iStock_000023022788Small-250.jpg

Interest rates on fixed-rate mortgages have been so low for enough years, that borrowers haven’t even given much consideration to an adjustable rate mortgage. Changes in the way adjustable rate mortgages are now made make them much safer for borrowers who understand how they work but also know they’ll only be in the home for a limited period of time.

Adjustable rate mortgages can go up or down according to an index that the lender has no control. The amount that can be adjusted is limited by caps for each period and for the life of the loan. While there are different periods for ARMs, the most popular lock the first period for five to seven years and then, can adjust annually after that.

One quick and easy way to determine whether an adjustable may be a viable alternative to a fixed would be to determine the maximum payment adjustments possible to find out when the savings from the early years are exhausted which would be the breakeven point. If the borrower is certain they’ll move prior to that date, the ARM will definitely provide a lower cost of housing.

The breakeven point for a $250,000 mortgage would be 8 years 3 months comparing a 2.9% 5/1 adjustable-rate with 1 and 5 caps to a 3.8% fixed-rate mortgage. In the initial five-year period, the payments on the ARM would be $124.32 lower and the unpaid balance would be $3,522 less than the fixed-rate to make a total savings of $10,981.

Article 02012016.png

Whether you’re buying or refinancing, get some good advice from a trusted lending professional about the adjustable-rate alternative. If you’re only going to be in the home a short time after the mortgage is made and your tolerance for risk allows you to feel comfortable, the ARM may be the best choice for you. Check out this ARM Comparison to use your own numbers.

%d bloggers like this: