Q: There's nothing like starting the day with an argument at the breakfast table. I just read that mortgage rates and home sales are tanking, and tried to convince my husband its time to buy a home. He says all of these low rates and home prices are based on bad unemployment figures, and that the economy is so bad we don't dare buy. Who's right?
A: Who's right isn't the issue, but instead the question is are you ready to buy a home? Are you planning to stay in your current location long enough to break even on closing costs? Have you saved enough for a down payment? (The larger your down payment, the lower your mortgage rate is likely to be.) Have you researched mortgage lenders and home loan options? Consulting a professional financial advisor can help with determining your readiness to buy a home.
Q: I just received a windfall of $50,000. I want to use it to pay down our mortgage and refinance, but my other half says we should pay off our student loans and credit cards first. Any thoughts?
A: Congratulations! There is no one-size-fits-all answer to this question, but here are some considerations. If you currently receive a tax deduction for mortgage interest, you could lose it if your refinance to a lower mortgage amount and rate. Eliminating student loan debt may make sense, depending on the amounts you owe and current APR on your student loan debt. If the APR is lower than current mortgage rates, the student loans are not a priority. Paying off high-cost credit card debt is a good idea. A compromise of paying off credit card debt and refinancing to a lower mortgage rate and amount is a good choice depending on your circumstances.