Advisors Management Group

Mapping Out Your Future with a Financial Plan
Just like a map or a GPS is needed for someone driving a car on a long trip, a financial plan is useful for anyone wondering about their financial future.  A financial plan lets us know if we are heading in the right direction, for example north instead of south.  Much like a long journey, life will have many twists, turns and a few unexpected bumps in the road.  However, with a well-planned route, we can have a clear idea of whether we are heading in the direction of our destination. What is a Financial Plan? A financial plan is a document that evaluates cash flow, assets, goals, and brings the information together in a document that predicts how much money and income you will have in the future. This document will be used to determine if your current strategy will accomplish your goals, or if you need a different one. Who can benefit from a financial plan? Financial plans are useful for people of all ages. A financial plan looks at money that is coming in (wages for most people), assets that you have saved so far, and what you are currently saving. This along with other factors helps to plan a path for your financial future.  This could be saving for a large purchase, paying off debt, or saving for the future (children’s education or retirement).  Financial plans are also helpful for people already in retirement as they can be used to help identify a strategy for creating retirement income, spending down assets, or planning to leave them to heirs. To prepare a financial plan your financial planner will need to gather some information from you. You will likely need to bring the following: Recent paystubs Last year’s tax return Statements for any retirement or investment accounts that you have Information on any pensions that you may have Social Security Statements (get yours at ssa.gov/myaccount ) More complex plans may require information about insurance and/or legal work Your planner will ask some questions to get to know you and find out what is important to you. A good planner will be interested in not just how much money you have, but also in what you would like to accomplish with your money. This conversation along with the data you bring to your appointment will help your planner to craft a financial plan that is specific to your goals. Your planning process will likely consist of several meetings. Costs are generally dependent on the complexity of your plan, and it is even possible that your advisor will provide some basic planning at no cost. Life will continue to change over time, for this reason it is important to revisit your financial plan with your advisor every so often to account for any detours or bumps along the road of life.  Financial plans are working documents that need to be adjusted as circumstances change. You should expect to update your financial plan several times during your working years. Generally, this will be every few years or when a major life change occurs. If you would like to find out more about having your personal financial plan prepared, contact us to set up your no obligation consultation today. Kate Pederson Investment Advisor Representative & Tax Preparer  Kate joined Advisors Management Group in December 2017. Prior to joining the firm, she worked in manufacturing and healthcare during her career as a financial analyst. Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.
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Category: Mortgages

06 Aug 2019

Advisors Management Group

Will Mortgage Rates Keep Dropping?

One silver lining from trade tensions with China and fears about a slowing global economy – the same factors whipsawing the stock market – is that mortgage rates are heading lower. That is helping homeowners and buyers alike. People who bought in the last two to three years may pocket major savings by refinancing their mortgage, while those hunting for a new home may get a bit more spending power, thanks to lower rates. The average rate on the 30-year fixed mortgage – the most popular for home purchases – fell to 4.01% for the week ending Aug. 2 from 4.08% the previous week, the Mortgage Bankers Association reported. That was the lowest level since November 2016. The average rate for 15-year fixed-rate mortgages – a common refinance option – slipped from 3.48% to 3.37%, the lowest since September 2016, the MBA said. Even lower rates are expected when the MBA releases its next report on Wednesday. “The Federal Reserve cut rates as expected ... but the bigger influence on the financial markets was the beginning of a trade war with China,” Mike Fratantoni, MBA’s chief economist, said in a statement. “The result was a sharp drop in mortgage rates, which will likely draw many refinance borrowers into the market in the coming weeks.” As trade tensions escalated, jittery investors poured money into longer-term U.S. Treasurys, considered safe investments, lowering their yield. Fixed mortgage rates typically follow the yield on the 10-year Treasury. “We fully expect that refinance volume will jump even higher ... given the further drop in rates,” Fratantoni said. Refinancing jumps The volume of refinancing applications increased 12% from the previous week and was 116% higher than the same week a year earlier due to the decline in rates, according to the MBA. John Stearns, a senior mortgage originator at American Fidelity Mortgage Services in Milwaukee, started three new refinancings, two of which were inspired by falling rates. Tech notes: Samsung Galaxy Note 10 and Note 10+ first look: Modest upgrades come at high price One homeowner has 16 years left on a 20-year mortgage. They are refinancing into a new 20-year at a lower rate and dropping private mortgage insurance, saving about $105 a month. A second owner has 17 years left on their 20-year mortgage and is refinancing into a new 15-year home loan, shaving two years off the life of the loan. “It’s not just about a lower payment,” Stearns said. “If people are able to knock off a few years of the mortgage, that’s a good thing, too.” Purchases stymied by market Homebuyers who got preapproved for a loan earlier this year may find they can qualify for a bit more than before, said Scott Sheldon, branch manager at New American Funding in Santa Rosa, California. “With today's reduction in rates at about 1%, people are getting about $35,000 to $40,000 of extra spending power ... right now versus a few months ago,” he said. “With today's reduction in rates ... people are getting about $35,000 to $40,000 of extra spending power” said Scott Sheldon, branch manager at New American Funding. The problem is that homebuyers in many areas still face a limited supply of houses. They may be preapproved at a low rate for a mortgage, but can’t find a house to put it toward. The number of mortgage applications for purchases decreased 2% for the week ending Aug. 2 versus the week before. Stearns, who closed recently on a purchase loan after the buyer was in the market for two years, is seeing new people come through the door looking to get preapproved. “But who knows when they’ll find something to buy,” he said. Source: USA TODAY