Tips to Curb Your Spending When the Economy Is in the Trenches
September 1, 2022
With inflation at an all-time high, many of us are taking a hard look at our spending habits. If we’re honest, as we’ve become more financially stable, we let lifestyle creep set in. That’s when the extra income we get from a raise or a new job goes into our way of living instead of our savings account. A 1-2% raise can alleviate some financial pressures, but as you relax your purse strings, new spending habits creep in. For example, instead of packing your little brown lunch bag for work, you start eating out for your lunch break. Or you add extra retail therapy to your weekends. But the current economy is forcing us to examine our spending habits under the microscope. If you need to make some changes to your finances, remember, a little bit goes a long way. A few lifestyle adjustments can stabilize your accounts and help weather the financial storm.
Like anything in life, moderation is key. You don’t have to go all in at once. If you’re not a strong swimmer, you shouldn’t jump headfirst into the deep end, but you could do laps in the shallow end and inch your way deeper as you get stronger. When it comes to being frugal, you don’t have to cut out every expense and live off ramen, but you can make incremental changes to become more spending conscientious. Make feasible changes to your lifestyle that you can realistically achieve. Start small, and over time, work your way to the deep end.
Let’s look at practical ways to cut back on your budget.
1. How much is your morning brew costing you?
Look, we get it. Everyone needs their morning fix. If you don’t rely on it to function before 10 am, that’s great! Most of us consider it a necessity as 62% of Americans drink it every day. If coffee is a necessity for you. how much are you spending on this cup of joy? The most popular Starbucks drink, the Grande Vanilla Late is sitting at $4.15. If you get one every day, or even several times a week, that really starts to add up. You may think you depend on this sweet and delicious late to cheer you on as you start your work day, but what’s it really costing you?
According to this breakdown by NextAdvisor, here’s what the hot (or iced) cup of joe is costing you per year.
Regular Coffee Pot - $45.90 per year
French Press - $160.60 Per Year
Keurig - $533.50 per year
Nespresso - $962
Starbucks - $2,007.50
If you are regularly getting coffee from major chains, that will hurt your wallet over time. Don’t panic! We don’t want you to give up coffee! But how can you make it more friendly to your budget?
If you LOVE the taste of fresh delicious coffee, try making it at home! You can buy an affordable coffee bean blender and coffee press for around $30. Even after purchasing the supplies, you would still be paying under $200 a year for coffee.
You can still get a delicious morning fix but ditch the green and white cups and settle for a to-go cup. Your savings account will thank you.
2. How much is eating out costing you?
Food is a hard one to cut back on because it’s easy to justify. Our basic needs to function are food, water, and sleep. Yes, a good meal nourishes our bodies and satisfies our souls, but how often do we justify the high price of eating out?
According to a survey by Fourth, the leading hospitality operations platform, 56% of Americans go out to eat or get takeout/delivery 2 to 3 times a week. 10% eat out 4 to 6 times a week, and 6% eat out every day
Even if you’re nifty and thrifty, how much do you spend a day on food? The most recent USDA findings for individuals 20-50 is $66.50 per week. That comes down to $9.50 per day.
You’d be hard-pressed to eat out for $9.50 outside of fast food for one meal alone. $9.50 per day is around $3.17 per meal. If you compare a meal for $3.17 to the average dinner at Chipotle for $15, the average meal out costs you almost $12 more than eating at home. Eating out three times a week would add up to $36 extra dollars spent on food. That’s only for one person.
At $15 per meal:
A couple dining out 3 times a week adds up to $90 a week, totaling around $360 per month.
A family of four dining out 3 times a week adds up to $180 a week, totaling around $720 per month.
Meal planning and stocking your fridge can help you avoid the pitfalls of eating out too much because “there’s no food at home.” Look over your bank statements and give yourself a reality check of how much you’re spending on your food and compare it to the USDA food plan. There could be vast room for improvement.
3. Budget Fun Money instead of splurge spending
A tactical mindset for saving money beings with creating a budget and sticking to it. A solid way to categorize your budget is 30% Housing, 30% Debt, 30% Saving, and 10% Fun.
Fun money is the category of your budget where you spend money on wants rather than needs.
What purchases should be put in the fun money category? Any purchases that are for entertainment or for personal enjoyment will typically go into this category. So, retail shopping, fun nights out with your friends, etc. These kinds of non-essential expenditures should fall into that section of your budget.
This portion of your budget is important because it leads to a less anxiety-filled life. When money is tight, you can be internally plagued by every personal purchase that you make. But when your weekend adventures are purchased with purpose, you shouldn’t have anxiety because that’s what this portion of the budget is for! It’s controlled spending. Keeping to the confines of the set amount prevents you from getting overwhelmed and can keep you out of credit card debt.
Setting aside fun money is important because budgeting is HARD, and we need to reward ourselves for sticking to our financial goals. Living on a budget can feel very un-rewarding but taking time for yourself can help you apricate it more than you would have if you treat yourself every time. You can have confidence in being a strong, responsible adult that’s on a path to financial success.
One Day at a Time
As the economy shifts, we have to shift with it. You may have to bend your finances a little, but you can be empowered by maintaining control. By implementing small changes, you will not have to overextend yourself. No one enjoys the panic of falling short of paying your bills, but tiny changes can allow you to take control of your finances instead of letting them control you.
Cutting back on your expenses shouldn’t be viewed as a life sentence. You may have to live less extravagantly than you want to, but the money you save now can evolve into serious financial security later on. Imagine if you’re thrifty lifestyle extends through the tight times, and you continue to save after the economic storm passes. What if you could break free from credit card debt or pay off your mortgage?! Focus on the benefits of being frugal instead of the setbacks. Lifelong accomplishments are made by making good choices each day.
It's almost impossible to completely change your lifestyle overnight, so start small. Sit down and make a list of what changes you can implement into your lifestyle to promote financial peace and security in the long run. You won’t regret it.
What Is Crypto Lending?
July 15, 2022
Cryptocurrency has become increasingly popular in recent years. Its exponential growth has propelled lending options and even mortgages based on crypto assets. Let’s look into what crypto is and how it works as loan collateral.
What is Cryptocurrency?
Cryptocurrency is a digital asset with value intended to be transferred over the internet. Bitcoin, the first and most popular form of crypto came out in 2008. It revolutionized the world of finance because, unlike traditional currency, its worth is not determined by a government entity, but by supply and demand. If there are more buyers than sellers, the price goes up, and if there are more sellers than buyers, the price will fall.
Unlike traditional currency, with crypto, there’s no need for a bank or payment processor. Its transactions are person to person. Crypto is built with blockchain technology to protect its users, and all that’s needed to buy and sell crypto is an internet connection.
What is Crypto Lending?
Crypto lending works similarly to conventional loans. The biggest difference is that the only assets used as collateral are cryptocurrencies. While getting qualified for a crypto loan, the lender would assess your crypto and determine what amount you qualify for.
If you have a lot of digital collateral, you may be considering using it as collateral to back your mortgage. Let’s walk you through the benefits as well as the risks.
No credit check: If your credit is on the low side of the spectrum, no worries. A lot of crypto-based lenders don't require a credit check. A crypto loan could be better than the traditional loan options for low credit scores.
Keep your crypto: You do not have to liquidate your digital currency because you use your crypto value as collateral.
The threat of margin calls: According to Drawbridge Lending, a margin call is “when the valuation of the borrower's collateral goes down to a point that the lending company will demand a “true up” to rebalance the loan to collateral ratio.” Cryptocurrency is highly volatile, leading to a higher probability of margin calls than other lending options. In the case of a margin call, the lender will likely require the borrower to “deposit additional collateral, repay a certain amount of the loan to balance it against their collateral, or have their coin liquidated by the lending company and face a heavy fee.” ¹
Large holdings necessary: For most lenders for a crypto mortgage, the collateral has to match the loan 100%. For example, MILO, a company claiming to be the world’s first crypto mortgage, will require 1,000,000 in crypto to back a 1,000,000 mortgage.
Ample documentation required for crypto and non-crypto lenders: Your crypto transactions must be thoroughly documented. According to Fannie Mae and Freddie Mac guidelines, any deposit that is more than 50% of the qualifying monthly income that’s awarded on a loan must be sourced. If you do not have proper documentation of your crypto transactions, you most likely would be unable to use that as an asset.
With any financial decision, be sure to do your research and find a solution that works for you. We like to keep our customers informed about current market trends and support their financial curiosities. If you are questioning what mortgage best fits your needs, please contact us today!
The Margin Call Problem In Crypto Backed Lending. Drawbridge Lending.
How to Plan Your 2022 Home Renovations
April 19, 2022
When the pandemic caused thousands of people to stay in the safe confines of their homes, it shaped a new critical perspective for many homeowners. There was a pressing need to revamp homes into recreational spaces and functional work environments, causing a spike in home renovations. According to the Porch survey, 76% of homeowners began at least one major home improvement project since the pandemic. Now, with inflation on the rise, it’s tricky to upgrade your home and get an optimal return on investment (ROI). You may be wondering, How will inflation affect the cost of my home improvement, and what will my ROI look like?
With the changing economy, it can be hard to know what’s a good investment for your home. The shortage of goods and workers against high demand has created the fastest annual increase of inflation we’ve seen in 40 years. With the current financial climate, you should be tactical with your home improvements, and we’re here to help!
Here are five improvements projected to yield a high return for 2022. So, when the time comes to sell your house, you won’t be eating the cost.
1. Replace the garage door
This may not be the most glamorous way to home renovate, but when we manage our renovations based on the ROI, replacing the garage door is TOP on the list. According to Cost vs Value 2021, the job cost is $3,907 and the resale value is $3,663, giving a 93.8% return on investment. It’s rare to get 100% back for your home improvements but replacing your garage door is most likely as close as you’ll get.
2. Add stone veneer
First impressions are HUGE. Adding a stone veneer is a way to give your home a pretty facelift while ensuring that people like what they see. Most importantly, it’s a bang for your buck. The average ROI for adding stone veneer to a house is 10,386 for the job cost to a $9,571 resale value, which gives you a 92.1% cost reoccupied.
3. Enhance your curb appeal
Whether it’s brightening your front porch with a fresh coat of paint or adding window boxes, you want to create a welcoming visual experience in the front of your home. According to Top Agent Insights for New Year 2022, buyers will pay 7% more for a house with great curb appeal versus a home with a neglected exterior. Enhancing your curb appeal allows you to invest in your home, and then get back from that investment when it’s time to sell.
4. Minor Kitchen Remodel
With a minor kitchen remodel, you keep the original footprint and focus on small updates. It includes replacing old appliances, installing new flooring and backsplash, and anything else that gives your kitchen a fresh look. Minor kitchen remodels cost on average $26,214 with a resale value of $18,927, giving a 72.2% cost reoccupied. You won’t be tearing it down to the stubs! In 2021 the average major kitchen remodel cost around $75,571 with an ROI of $43,364 with only a 57.4% cost reoccupied. When it comes to a kitchen remodel, less is more!
5. Add a pool
From pre-pandemic to 2021 the value of having a home pool went up 69%. The pandemic caused many people to focus on building home environments that promote lifestyle and healthy living. When everyone was forced to entertain themselves at home, pools grew into a valuable commodity. Of course, you have to consider the climate and community, but for many people, this is a good opportunity to invest in a fun outdoor outlet for your family.
The economy is unpredictable, and it can be hard to gauge what will actually yield a return. Your home is an expression of yourself, but as you make updates, stay tuned to the current trends and areas of high inflation. When it comes time for you to start any of your home renovations, contact us to see if you can use the equity out of your current home with our Home Equity Line of Credit program.
How Your Credit Score Affects Your Mortgage
February 8, 2022
The housing market is ramping up, and many people are looking to invest in a home. One of the biggest concerns in the home-buying-process is how your credit score impacts your loan. Whether you’re getting a mortgage or have your eyes on your future dream home, here are a few things to consider about how your credit score is impacted and how it affects the long-term cost of your mortgage.
1. There’s a Big Difference Between Having Good and Great Credit.
Your credit score reflects the loan you have access to and its interest rates. Even a slight shift in your score can significantly affect the long-term cost of your mortgage, potentially costing you thousands of dollars in the long run. Here’s is an example based on a 30-year fixed loan of 200,000 based on current rates using the interest calculator from myFICO.
Note: All numbers here are for demonstrative purposes only and do not represent an advertisement for available terms. This example is based on a $200,000, 30-year loan and the interest rates as of Jan. 25, 2022. Calculations were made using the MyFico loan savings calculator.
There can be a huge difference between the interest rates of “good” and “excellent” scores. In this example, having a FICO score of 680-699 will give you an APR of 3.595%, resulting in a monthly payment that’s $45 more per month than a credit score of 760-850 with an APR of 3.196%. Over the course of the mortgage, the total interest for an APR of 3.595% is $15,923 more than an APR of 3.196%. Having an excellent credit score would save thousands of dollars in the long run.
Over time, a small difference in your score could bump up your rates and have a major effect on the total interest of your loan. For more information on how your credit score can impact your mortgage, use the interest calculator from myFICO and input your personal information, or give our experienced team a call.
2. Pulling your credit score for a mortgage industry does not have the same negative impact as it would for a credit card or a hard money loan.
People are often concerned with how inquiries will impact their credit score. Inquiries can remain on your credit report for up to two years, but they typically have a minimal effect.
According to Loan Originator Jonathan Fry, “Oftentimes clients are nervous about having their credit pulled, even though it is necessary. I always advise them that a mortgage inquiry affects your credit differently than a credit inquiry for a credit card or a hard money loan. While those types of credit pulls absolutely can have a negative impact on credit score, the bureaus view mortgage inquiries a little bit differently. In essence, you are applying for credit to spend money rather than receive it, so a mortgage inquiry does not have that same negative impact.”
In most cases, inquiries only have a minor effect on credit scores. According to Consumer Education Specialist Jennifer White, “They generally have little or no effect after a few months.”
3. Know Which Score Matters the Most.
Before you jump into the housing market, make sure you’re aware of what credit score the mortgage lender is pulling. Their results may be different than what you expect.
The FICO score model that a lender uses will differ depending on what you’re borrowing. Auto loans, mortgages, credit card companies, and other borrowing industries have differing score models that obtain different pieces of information necessary for your loan. According to Credit Expert Gerri Detweiler, one factor affecting these models is risk. “All credit scoring models are trying to predict some type of risk, but how they go about it varies because different lenders are assuming different levels of risk. The risk a lender takes when it makes an auto loan is different than the risk a lender takes when it issues a credit card. Different models can help lenders understand those different types of risk.”
The varying levels of risks are a major factor contributing to the number of credit score models. Mortgage lenders use the specific credit score models that the Federal Housing Finance Agency dictates. Although there are newer models, currently, these are the industry standard.
Equifax Beacon® 5.0;
Experian®/Fair Isaac Risk Model V2SM
TransUnion FICO® Risk Score, Classic 04
Because of the varying credit score models, the score you obtained through your credit card company may differ from what your mortgage lender pulls. One option to get a credit score based on the models used by mortgage lenders is from myFICO.com. Know that your score may adjust between the time that you check it and the time your lender checks it. According to Certified Mortgage Advisor Kyle Seagraves, “The only way that you get exactly what the actual mortgage [credit score] is going to be is to have that hard pull done by a lender.”
If you are still unsure how your credit score affects your mortgage, talk to a professional! Our experienced loan originators would be happy to assist you and personally answer any questions you may have. Please call us at (480) 443-9090, and we will direct you to one of our qualified team members.
LHM Financial Is Proud to Support Heroes on Horses in Their First Appearance in Arizona
February 3, 2022
LHM Financial is proud to support the NSBA Foundation’s Heroes on Horses as they ride to the Arizona Sun Circuit for the first time. Heroes on Horses is an equestrian competition for all active or retired US military personnel. Since 2011 Heroes on Horses has presented a creative platform for veterans to develop their equestrian skillset, requiring no fee for participation. Heroes on Horses is a project of The National Snaffle Bit Association Foundation. Their mission is to “enhance the well-being of the show horse community through various charitable programs that benefit horse people, horses, and the relationships they create.” Heroes on Horses is a great way to recognize and appreciate our brave men and women who have served our country.
How to Design In-Home Office Spaces Where You’ll Be Productive
November 09, 2021
Home offices are becoming the new norm.
Homes are changing.
With so many people making the shift to working remotely, either part-time or full-time, homes are now where we are expected to focus, concentrate, and be productive, no matter what is going on in the background.
As a result, many people are setting up at-home workspaces and looking for home office decor ideas that will let them do all the things they used to do in the office while surrounded by all of the comforts (and distractions) of home.
If you can relate, and you find yourself wondering how to go about creating a productive workspace at home, we have some ideas to share with you.
As a full-service mortgage broker with over 20 years of serving homeowners, we’ve learned a thing or two about homes and how to adapt them to the people who live in them. So we’ve collected our top tips on designing your home office for minimum distraction and maximum productivity.
1. Choose a Spot with Plenty of Natural Light
2. Use Soundproofing to Create a Quiet Oasis
Noise from children, dogs, delivery people, neighbors, and local wildlife are all part of the “symphony of sound” that can ruin the peace and quiet of a home office. The good news is, you don’t have to live with a constant stream of racket and you also don’t have to go to the trouble of installing professional soundproofing.
There are plenty of simple ways to reduce noise and create a peaceful and productive home office, such as:
· Choose a room with a door that closes fully
· Use area rugs and soft furniture to cushion and absorb sounds
· Hang tapestries and large pieces of wall art
· Position a “door snake” at the base of the door
· Apply insulating tape around the window frames
· Get a white noise machine
3. Make Sure You’re Wired and Ready to Go
4. Use Aromatherapy to Boost Your Focus
The best interior design office space ideas are about more than just furniture and objects; they’re about creating an entire environment that promotes focus and concentration. This is why scent is also an important element to consider when creating a productive workspace at home.
Certain scents, such as lemon, lavender, and peppermint, are proven to enhance focus and productivity. So it’s worthwhile to invest in an essential oil diffuser that releases a steady stream of scents that will fill your home office throughout the day and help you stay motivated and on task.
5. Bring in Some Color and Life with a Desk Plant
Another excellent way to upgrade the look and feel of your home office for maximum productivity is with plants. Just like with aromatherapy scents, the mere presence of a plant contributes to an atmosphere that’s vibrant, inspiring, and pulsing with life—just the kind of setting you need to be creative and focused.
There is also a practical reason to keep a plant close by they give your eyes a much-needed rest from staring at your screen. Place one within your eye line, where you can easily use it when applying the 20-20 rule for screen time, which recommends taking a break from your screen every 20 minutes and looking at something else for 20 seconds.
Key Takeaways on How to Design In-Home Office Spaces
Your home is your castle, and for many of us, it’s now our office, too. With a little bit of thought, it’s easy to make the transition to working from home a seamless one. In a well-designed home office, you can actually be more productive than you were at your company’s office space, whether you were in a cubicle or a corner office.
Studies have shown that daylight is not only a mood booster, it’s also a productivity booster. It’s also the number one office perk that employees look for in a traditional office.
So when you set up your home office, it makes sense to capitalize on the power of solar energy to energize and uplift you by choosing the sunniest spot in your home. A room that has a large window is an ideal choice—just make sure that you have dark curtains or blinds you can close when the sun gets too bright and too hot for comfort.
If you don’t have the space to devote an entire room to permanent in-home office space, you could also consider setting up a makeshift office in a bright corner of your living room or dining room. A popular home office interior design idea is to partition the space with a folding screen that gives you some much-needed privacy and a clear division between workspace and home space.
A spotty internet connection is a surefire way to interrupt your workflow and zap your productivity. Set yourself up for success by making sure your Wi-Fi is strong enough to reach your in-home office space. This is especially important if you’ve chosen to locate your office in your backyard or garden.
If you find that your internet connection isn’t as strong or reliable as you need it to be, you can improve it with a Wi-Fi signal booster or get a dedicated router for your office.
2021 HW Woman of Influence
AUG 2, 2021
We are so proud to announce our President has been selected as a HousingWire Woman of Influence! It is one of the highest awards women in housing can earn and, out of the hundreds of submissions, she was one of 100 winners.
Matthew Kranz & Nash Paradise
JULY 1, 2021
LHM Financial would like to recognize Matthew Kranz and Nash Paradise for their promotion to Branch Manager! Matt and Nash have been with LHM for six years. They are consistent President’s Club award recipients, a designation for top sales within the company. Congratulations Matt & Nash, on your continued success.
2021 HW Finance Leaders
MAY 5, 2021
40 of the most impactful corporate finance and capital markets executives in the housing.
Congratulations to Julie Messina for her recognition by HousingWire as an industry Finance Leader!
We know she is the best and we are glad to share it with everyone else!
APRIL 22, 2021
Vice Presidnet at LHM Financial Corporation.
LHM Financial Corporation would like to recognize Angie Smith on her promotion to Vice President. Angie has worked in the home financing business since 1998 and has been a Loan Originator with LHM for 13 years. She is a consistent President’s Club award recipient, a designation for top sales within the company, and she is dedicated to helping every client achieve their dream of homeownership. Congratulations Angie, on your continued success.
MARCH 22, 2021
Branch Manager at LHM Financial Corporation - Northshore.
LHM Financial Corporation would like to recognize Ben Nihart for his promotion to Branch Manager. Ben has worked in the home financing business for 4 years and has been a Loan Originator with LHM since 2018. He has successfully climbed his way to a designation for top sales within the company, and he is dedicated to helping every client achieve their dream of homeownership. Congratulations Ben, on your continued success!
Program Announcement - Long-Term Rate Lock
MARCH 16, 2021
Secure Your Mortgage Interest Rate Today!
An Extended Rate Lock can lock in your interest rate today while your new home is under construction. This is also available on Conventional, Government, and Jumbo Loan Programs. Interested in learning more? Call us today!
LHM LO's Rank Nationally
APRIL 1, 2020
Scotsman Guide Releases Top Originators 2019 Rankings.
Tiffany and Nash were ranked among entries from more than 6,000 mortgage professionals across the country. To be eligible for initial consideration in Scotsman Guide‘s Top Originators rankings, originators must have had at least $40 million in loan volume or 100 closed home loans for the 2019 calendar year.
LHM Recieves 2020 Best Of Scottsdale Award
MARCH 13, 2020
Scottsdale Award Program Honors the Achievement
LHM Financial Corp has been selected for the 2020 Best of Scottsdale Award in the Mortgage Bank category by the Scottsdale Award Program.
Each year, the Scottsdale Award Program identifies companies that we believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and our community. These exceptional companies help make the Scottsdale area a great place to live, work and play.
LHM is Officially Launched
JANUARY 6, 2021
Focusing on current technology innovations & modern appeal to new & existing homeowners; CNN Mortgage rebrands their company name & image.
January 6, 2021 – CNN Mortgage, an established leader in mortgage lending, has announced today that the company will begin operating under a new name and will be known as LHM Financial Corporation. This rebranding strategy reflects both the evolution of the company as well as its vision for the future. Along with this change, a newly redesigned company logo has been revealed and a new website has been launched. This will feature the company’s focus and drive to continue serving their community with the same excellent financing options available in today’s mortgage lending environment. Customers, vendors, and partners will find no change in the quality of products or services offered, obtaining information, or conducting business with our new identity.
Founded in 1998, CNN Mortgage has built a strong reputation as an outstanding mortgage banker, servicing the lending needs of individual home buyers, real estate professionals and builders with an experienced staff offering knowledge in every area of mortgage lending.
About LHM Financial Corporation: LHM Financial Corporation not only strives to deliver customized service to meet our clients’ individual needs, we care about our clients having an affordable mortgage in order to increase quality of life. Mortgage lending isn’t just about buying a home, it’s about walking in each step of the American Dream. Headquartered in Scottsdale, Arizona, LHM Financial is licensed in ten states with offices in four of those states.
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