APM Elevate: May 2024


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As spring kicks into gear, we’re all about making sure you’re in the know and feeling confident about your money matters. This month, we’ve cooked up a mix of juicy topics for you. Wondering how different generations value their time? Curious if an adjustable rate mortgage could be your thing? We’ve even got a quick Bitcoin update and some fun decorating tips to spruce up your space! So, grab a seat, get comfy, and let’s dive into the world of home sweet homeownership and finance together.


Time and Money: Different Generations, Different Values

A national investment advisor recently published a study that focused on Americans’ plans for reaching their financial goals. The results: time is money, and there’s a premium. Respondents described their time as worth $240 per hour on average, although different generations’ numbers varied.

Based on a standard 40-hour week, that put the perceived value at $499,200 per year – nearly eight times higher than the average U.S. salary of $59,384.

Here’s how different generations* described an hour of their time’s worth:

  • Generation Z: $266.92
  • Millennials: $328.84
  • Generation X: $215.90
  • Boomers: $137.19

One-third of the respondents set their rate at under $50 per hour, although 25% of Millennials valued their time at over $500 per hour, and just 6% of Boomers named that rate.

When it came to spending money to save time, different generations had differing views. 36% of Millennials would pay up to $10,000 for someone else to do their chores and cooking, while 30% of Gen Z respondents said they would pay up to $5,000 annually to farm out tasks like cleaning and yard work.

Quality time was valued highly, as six in 10 people “felt wealthy” if they had time to spend with family and friends. Nearly a third felt comfortable taking on debt if it bought them more free time (29%) or a memorable experience (29%).1

* Current ages: Generation Z, 18 – 27; Millennials, 28 – 43; Generation X, 44 – 59; Boomers, 60 to 78.

Source: empower.com


Is An ARM Right for You?

If you’re currently shopping for a mortgage, you may be considering an adjustable rate mortgage or ARM. While an ARM may provide a lower interest rate during the first years of your mortgage, the long-term scenario will be different than what a fixed-rate loan offers you.

  • ARMs often have a 30-year term, like fixed-rate mortgages. However, the interest rate can change more than once.
  • During the first years of the ARM’s term, the rate will not change. Adjustments begin according to the structure; for example, a 5/1 ARM offers a five-year initial rate, before adjusting every year.
  • ARMs are popular with borrowers who expect to move again in a short period of time, or whose household income will be increasing soon.
  • Refinancing an ARM to a fixed-rate mortgage before the first adjustment may lock in an affordable rate, but this is not guaranteed.
  • The ARM’s interest rate is based on an index rate like the Secured Overnight Financing Rate (SOFR), with a margin added to the index.
  • An ARM features three rate caps. These determine how much the loan’s interest rate can increase during the first adjustment, additional adjustments, and during the life of the loan.

If you’d like to get some information about the differences between fixed and adjustable, we have a great article here that outlines all the details.

Source: morningstar.com


Confused By Crypto? You’re Not Alone.

Personal finances can be tricky territory, even when we feel like we have a good grip on our budgeting habits. According to a recent study, 79% of us find at least one financial topic intimidating, with cryptocurrency at the top of the list.

There are several reasons for this. Many respondents, having learned their budgeting basics from their parents, grew up before cryptocurrency was introduced. Recent headlines are confusing; some encourage investing in crypto while others define it as high-risk. Even worse, some major cryptocurrency scams have made headlines.

Like most investments, the more you understand the origins and management of an investment, the less stress you’ll feel. But cryptocurrency investments can be complex and unforgiving. For example, there’s no way to cancel a crypto transaction once it’s been sent, and some financial analysts have estimated that about 20% of bitcoin is now inaccessible due to a lost password or incorrect sending address.

If you’re one of the 84% of Americans who are feeling some financial stress, these traditional money management methods are as valid in 2024 as they’ve always been. Keep a nest egg of savings handy, minimize high-interest debt, and do your investment homework.

Source: nerdwallet.com


Take Your Inspection Further with Home Permits

You’re probably already aware of the inspection phase of buying a home: in addition to an appraiser’s determining fair market value, it’s highly recommended that buyers hire a home inspector. However, it’s also worth checking out the permits acquired by the home’s current owner, especially if you spot major renovations.

For example, what about the swimming pool or deck? Did the homeowner hire a licensed contractor who acquired the necessary permits before beginning the projects? This could help you spot potential red flags, as any work carried out without a permit could be DIY jobs carried out by a well-meaning homeowner on a budget.

Most local authorities require permits for renovations like additions, pools, and major electrical and plumbing work. While acquiring a permit can be time-consuming, it ensures that the work will be done according to local building codes. But some homeowners will skip the permit as they’re in a hurry, on a budget, or unaware of the need for one.

If you buy a home with un-permitted work, you may end up dealing with one or more major problems like electrical shorts or leaky plumbing. If you make an insurance claim, this work may not be covered.

However, researching a property’s permit history isn’t difficult. The owner may be able to produce these, but if not, contact your municipality’s construction office. Comparing the home’s square footage on file with the square footage you see during a walk-through is a good way to identify a new addition.

If you or your real estate agent identify any un-permitted work, you have several options. You can request that they acquire a permit and arrange for an inspection, ask for a price reduction, or keep looking at other properties.

Source: lifehacker.com


Does More Small Print = Higher Prices?

The Consumer Financial Protection Bureau (CFPB) recently published the results of research on pricing structures for common financial products. While some of a contract’s small print is often required by law, the CFPB found that consumers often paid more when a product’s pricing structure and “add-ons” were more complicated than its competitors.

For example, an auto loan or credit card application may be advertised with an attractively low interest rate, but this only represents a portion of the actual price. The buyer may also be paying for add-ons like an extended warranty or insurance product, the costs of processing the application and other fees. The CFPB described this practice as sub-pricing.

CFPB researchers found that offers with sub-prices often added up to being considerably more expensive. For example:

  • Sellers’ total asking prices were 60% higher in markets with sub-prices than those with a single price.
  • Buyers were 15 times more likely to select a higher-priced option in markets with sub-prices than in those with one price, due to confusion caused by the sub-pricing.
  • On average, transaction prices were 70% higher in markets with sub-prices than in those with one price.

In conclusion, while nobody enjoys reading a multi-page contract, it’s essential to understand exactly what will be included before you sign on the dotted line.

Source: consumerfinance.gov


Bite-Sized Burgers

These are a lot tastier than your average slider, and easy to serve during a Memorial Day event. You can also customize your bite-size burgers by substituting ground turkey or another type of meat for the beef.


Redecorating Ideas for Older Homes

Whether you’ve inherited an older home or bought a prized bungalow or Victorian home, many of their original features are equally useful and attractive. However, these may have been removed or replaced. Here are some ways to bring an older home back to its original look.

Archways are commonly seen in older homes. They soften square corners between one room and another, especially larger ones. Replacing a missing or damaged archway, or painting an existing one, can be an inexpensive but rewarding project.

Transom windows are found over doors and above a room’s main windows. They improve the airflow and may also allow more light into a room. If yours have been painted over, you may discover a beautiful brass or wooden frame by stripping the paint.

Antique light fixtures can be pricey, but adding one or more to your home can emphasize its original features. If your home’s original fixtures are in the attic or garage, cleaning and re-installing them is well worth the effort.

Hand-laid mosaic tiles were popular in older homes, although tile was initially introduced when toilets were moved indoors. If your bathrooms have linoleum floors, you may find the original tile underneath. Installing new tile with a retro design is another weekend project to consider.

Built-in bookshelves often frame a bungalow’s fireplace. Replacing the original shelves or adding doors to existing ones can add appeal and functionality.

Finding replacements can be an adventure, especially if your town or city has one or more architectural salvage stores.

Source: hgtv.com



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