Tag Archives: PMI

Lower Rates MAY Have Created an Opportunity … Refinance that Mortgage? – Here’s Some Tips

As mentioned Friday, with an inverted yield curve, mostly caused by longer term rates being lower than short, an opportunity MAY have been created….

We are going to put this in the Newsletter with more details, so please do not take this as an “ok” to run out and start refinancing, there likely is no hurry AND its a big decision…..

Mortgage Rates are Low Again

This chart is the Average 30 year rate across the US –

30 Year US Avg Mortgage Rate

Here are a few points and rules we like to think about when considering a refinance:

  • Think 18 months cost break even – We like to have the saving from the refinance cover the cost of the refinance within 18 months – i.e. Person with $30k mortgage at 5% probably would not need to refinance to 4%, but a $3 million mortgage may be smart to refinance from 4.25% to 4% or the like, if the numbers work out.
  • Resetting Term – Remember if you reset your term, you are extending the treadmill – You may consider paying extra after the refinance to keep on prior term if desired.
  • Planning on staying – It makes no sense what so ever to refinance if you are planning on moving in the next couple of years – life’s curve balls always happen, but if you are planning to move, likely pass on the refinance.
  • 30 Year Fixed Mortgage is our favorite as you can accelerate your term by paying extra, but a 15 year had its merits too, especially if the rate is greatly different – we are not big fans of Variable rate loans.
  • Closing Costs- keep low as possible- This will make your payback faster, easier and also give you the opportunity to refinance again in the future without angst.
  • Buying down points to lower rates – We are not fans of buying down the rate – Ultimately this increases your closing costs and extends the break even analysis from above – If you did on the last mortgage, review where you are and make sure you are out of your break even period before refinancing again.
  • Ancillary fees – It’s a complicated transaction and there are costs associated with it, deservingly so, but try to keep costs down so as to once again keep your break even period short.
  • PMI – Private Mortgage Insurance – Stay away from this if at all possible. This insurance is a cost to you and does nothing for you as the owner/loan holder.
  • Deductibility of cost – Some costs may be deductible, consider costs that are deductible for taxes over costs that are not – With changing tax laws, expect confusion on this point.
  • Avoid teasers – If you google mortgage rates you will get some outlandish offers, if it sounds too good to be true, it is, there is always a catch. Don’t bite on something that is way different than the others.
  • Careful with Hard Credit Reports – Once you lock in on a decision, avoid running multiple Hard/thorough credit reports (these are needed for mortgages) as duplicate checks will lower your credit score.

Have a Great “Possible Refinance Mortgage” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

March 2016 Video, Monthly Review, Tax Tip By John Kvale

What a different a month (or two) can make. Here is our March 2016, all new…trendy format Monthly Capital Market Review and last minute tax tips, along with a Video for your viewing and listening pleasure. Hope you are enjoying!

 March 2016 Video



Final Reminder Tax Tip

As Moto Moto said in Madagascar, these tips are so good we had to say them twice!

Our favorite tax savings ideas that still work for last year (2015 taxes):

  • Itemize your standard tax deduction
  • HSA- Health Savings Account
  • Fund an IRA
  • Simplified Employee Pension – SEP deduction/contribution against non W-2 income (1099)

Tax Fraud Alert

As noted here, last month we had our first incidence of fraud in February. We are now up to 9.5 so far, as we have one incident that we think was fraud, but could not be proven!

Be sure to keep your guard up!


Economic Update

PMI Manufacturing Index

PMI  (Definition: The ISM manufacturing composite index indicates overall factory sector trends. The relevance of this indicator is enhanced by the fact that it is available very early in the month and is not subject to revision.) Graph from our friends at Econoday.

Less than 50 is contraction, greater than 50 is growth.

3-31-16 PMI from Edonoday

Employment Situation

While there was a small increase in unemployment claims late in March, the overall employment picture, via hiring, as can be seen below, again from our friends at Econoday, remains steady. It is worth noting, these reports can be volatile.

3-31-16 Employement Situation from Econoday

Capital Markets Update

Updated Support and Resistance

This Graph, included in our Newsletter, shows the updated Support and Resistance lines and levels of the current market.

As mentioned in our Yellen Speaks post, after telling capital market participants that slower rate increases were more likely (late 2015 she told the world to expect four increases, now only two) capital markets smartly broke through the lower upper resistance. Now, can we go to new highs ? Maybe …

Never go all in or all out !

3-30-16 S&P Chart

Oil and Market Correlation Chart

For those that think oil does not affect the sentiment and capital markets, look at this chart from Liz Saunders :

3-31-16 S&P Crude correlation

Sorry for the motor mouth/fingers … there were a lot of moves worth noting, especially very near the end of the month !

Have a Great Day!

See you again at the end of April !

John A. Kvale

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
JK Street Cents Logo

August Financial Planning Tip, Economic and Capital Market Review (Video)

August has come and gone. Say goodbye to the warm weather in most parts, hello to fall, and …. are you ready for some FOOTBALL. (Glass can always be half full!)

Newbies to our writings, we do this monthly and even include a video for an extra personal touch. Each month we strive to bring you a neat Financial Planning tip that may help you save or earn, this months is once again directly from the trenches. …  So let’s get started.


Direct Link to YouTube August 2014 Video

Vimeo August 2014 Direct Link

Financial Planning Tip of the Month:

Get rid of that PMI Insurance

Now that housing prices have come back, if you happen to have PMI insurance, there is a way to rid yourself of this expense.

Once your loan to value is better than 80%, try the following:

  • Call your mortgage company and ask them how to remove your PMI insurance premium
  • They will most likely ask you for an appraisal of some type (do not order this appraisal directly, your lender will most likely do this for you)
  • Complete the appraisal and the necessary forms from your mortgage
  • Return the documents to your mortgage company and tadaa .. you will have a lower payment without the afore mentioned PMI insurance premium

That’s it … with many more fun planning tips to come ..thanks to those in the trenches with great questions !

OH NO … Interest Rate Talk AGAIN … Yep ! Sorry

This eloquently said from Bloomberg View, by Mohamed A. El-Erian, Allianz SE Economic Advisor:

Bond investors tend to be more risk averse than equity investors, and thus reposition earlier in response to a higher probability of a market selloff. This is in part because they are more focused on the macroeconomic picture, and in part because bonds have a different risk-reward profile: They ultimately pay only their face value, whereas stocks can keep going up.….

In English … Lower bond yields warrant special attention … We have LOWER yields. We plan on digging deeper into this next month, but for now .. Attention is very warranted.

10 Year Treasury 8-29-14


Special Goodbye to Robin Williams

Robin Williams

Depression hits most at least once in their life. If you know someone who may be on the edge, take the cue from one of the funniest person’s ever and get them help. Mr. Williams you will be missed nano nano !

 That’s the August 2014 Review,

Thanks for reading/Listening/Watching 

Have a Great Day!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225