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RFM Financial Solutions, LLC

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Seasons Greetings from our family to yours!

May you have a blessed holiday season!

Written by: Tina Powell, CPA.


There are many things to consider when refinancing:  interest rate, closing costs, terms, value of your home.

How do you know when the right time is?  The rule of thumb is that you should refinance whenever you can lower your interest rate by 1% or more. 

For Example: A $150,000 30 year mortgage at 4.5% interest would require a payment of $760.03.  The cumulative interest paid over the life of the mortgage would be $123,611.  That is almost the cost of another home.

That same 30 year mortgage, if refinanced at 3.5% (current rate) would require a payment of $673.57 (an $86.46/mo savings) and have a cumulative interest of $92,485 (a $31,126 savings.)  If you paid the same payment of $760.03, you would pay off your mortgage 5 ½ years sooner and save another $18,800 in interest. 

Wow!  That is $31,100-$49,900 in savings just by doing some paperwork.  Obviously, there are many more options, like 10, 15 and 20 year mortgages, 5, 7 and 10 year balloons, etc.  It is typical that the shorter the repayment period, the lower the interest rate, which means more savings.  You will want to run the numbers to see what you can save and what is the best fit for you.  There are many mortgage calculators on-line, call us or talk to your current mortgage loan officer.

But what about closing costs?  If you stay with the same lender sometimes there are smaller closing costs, but not always, it’s okay to shop for the best rate.   You may want to try to pay closing costs up front if you can.  If you roll them into your mortgage, your mortgage may be higher and some of the savings lost, but it’s not usually enough to make a big difference.  If we added $2,000 in closing costs to the mortgage, the payment would be $682.55 (only a $77.48/mo savings) and $29,893 saved in interest. 

If you are in a situation where your home value has declined, now may not be the right time for you.  The lender will require that your mortgage be 80% or less of the value of your home.  If your home will not appraise at a high enough value, you may not be able to refinance, even at a higher rate.  You may have to wait it out.  As the economy continues to grow, so will your home’s value.  It may be worth spending the approximately $350 appraisal fee to determine if you can save thousands in interest.  Your loan officer may be able to determine if you qualify for governmental programs that allow for lowering your monthly payment or refinancing even if your home does not appraise at 80% or more of your mortgage.

Robert F. Murray & Company CPAs, P.C. making your money work harder for you.

William Barrett of Forbes magazine wrote an interesting article that discusses how even if your in your 50’s and have not saved for retirement, there is still time!  There are some great tips and tricks to this.

Click here to read the entire article!

A few months ago we conducted a client survey on our financial services.    We had a great response!  It allowed us to gather information about how we were doing and how we can improve our services.

There is a little bit of trepidation when you ask a client “How are we doing?”   We were very pleased and honored when over 90% of those who responded said they were “very satisfied” or “satisfied” with our services and their relationship with their advisor.   The majority of them were in the “very satisfied” category.

While this is a great compliment, we do not want to become complacent.     Areas which were indicated that we could do a better job or offer our clients additional services, as well as the ways of addressing these concerns, are the following:

  • Visiting Our Website.    We recently made major changes to our website to make it a more useful tool for information.    You should have received an announcement about this recently.
  • Using Schwab Services.    I recently mentioned how I am using their check deposit feature on my cell phone.   We will keep you informed about additional services you may find convenient and useful.
  • Additional Contact With Clients.   We currently set up two formal meetings per year with our quarterly clients to discuss in detail their portfolio and their plans.    Our plan is to add additional contact throughout the year to discuss any changes in their plans and the status of their account.    These additional contacts will most likely be in the form of a conference call that is set up in advance.     It is important to note that we do not have a limit on how often our clients visit or contact us.    We have an open door policy with all our clients.

Another exciting result of the survey was that 100% of those who responded said they would refer a client to us!   Referrals are the key to growth in financial and professional services.   In fact, 80% of new business generated in our industry comes from referrals by clients and business partners.    We are accepting new clients and looking to further increase our business.

Granted, not everyone talks about money with their friends.   However, there may be certain life events that warrant the need for a referral or change.   Some examples of life changing events where we have helped a number of clients are:

  • Job change or separation
  • Divorce
  • Retirement
  • Loss of a family member
  • Bad investment experiences

If you, or someone you know, are experiencing any of these life changing events, give us a call so we can assist you through these changes.

Again thank you to those of you who participated in our survey.   We greatly value your input and look forward to using that information to better our service to you.