The Refinancing Rush

Mortgage interest rates are the lowest they've been in, well, maybe forever. But if you think the time is right to refinance or maybe get a mortgage on a new home, you'd better take a number. Those rock bottom rates and real estate possibly heading toward a buyer's market are causing log jams with lenders.

So how do you capitalize on current conditions? Well, today host Rob West talks with mortgage expert Dale Vermilion to find out. Then we take some calls from all across the country.

However, today's edition of the program is not live. We are pre-recorded. I'm Steve Moore, the Refinancing Rush. That's next on MoneyWise Live. Rob, our guest Dale Vermilion wrote the book on mortgages.

In fact, it's called Navigating the Mortgage Maze. And if there's one guy who can make sense of today's unusual real estate scene, it's our old buddy, Dale. That's so true. And Dale, great to have you back with us. Always, always an honor and always a privilege to be with you guys. I love it. Glad to be here.

Thank you, sir. When you started your business, Dale, back in 1983, mortgage rates, interestingly, were around 17%. Did you ever think we'd see them as well as they are today?

Not in my wildest dreams. And frankly, they're just going to continue to keep going down from everything we see. We could literally, Rob, see rates under 2% on 15-year term mortgages before this thing's over. Wow.

Incredible. What do you think will drive that move below where we are today? I just think if we see the continued pressures from the coronavirus pandemic, the continued economic pressures, we're in an election year. Nobody's going to change rates in an election year.

All of these things combined together. This is the one thing that's doing well in the economy. I think they're going to keep driving those rates down. Yeah, interesting. Dale, given all of that historically low rates and folks that are really looking to take advantage of them, describe, if you will, what's going on in the industry and in particular, the pressure this is putting on the mortgage system.

Well, I like to call it controlled chaos, but I'm not sure it's controlled to be honest with you. You know, you've got volumes that are two to three times the highest we've ever seen in the 37 years I've been in the business in refinance activity. Plus, you've got a very ripe purchase market.

You combine those two things, it's utter chaos and companies are literally just trying to balance as much as they can to handle the business they've got. Are there ways to actually expedite the application process to try to shorten the timeline on how long it takes to get one of these done? You know, there are because even in a crazy time like this where you're going to see, you know, 60 day locks instead of typical 30 day lock, sometimes even 90 days that has taken to close a loan, the more prepared you are as the borrower, the more documentation you have when you start, the more you do your budget and you have credit explanations for issues and you make sure that you have everything together, your income documentation, your mortgage statements, you know, your insurance information. The more you do that, the more you can expedite the process and be on the shorter side of those long timeframes. Yeah. Well, that's key. You know, whenever you're making a major transaction, purchasing a home, trying to secure a mortgage, refinance a mortgage, having that documentation in order is so key.

It's a great thought, Dale. Dale, is the demand and the backlog of mortgage applications you're talking about affecting the ability to take advantage of these low rates and actually lock them in? Yeah, it's not really affecting the ability to lock them in. What is happening right now is most lenders are extending their lock periods much longer and you're seeing contracts with realtors that are starting to extend past the normal 30-day timeframes that we usually see. And a lot of the lenders, what they're doing, because they don't know how long it's going to take, is they are insuring and they're making sure that if your lock expires, that they're covering the cost of the extension. But that's a really important question to ask when you're applying because normally there's a fee that you have to pay if you want to extend your lock. You want to make sure going in, hey, if this for some reason doesn't get closed in the time that you think it is, will you extend my lock without charging me and protect my rate?

Ask that question. That's a critical question to ask your lender. Yeah, let's talk about this lock just for a second more. I know there's something called a float down. Would you expect that as rates continue to come down, even during your lock period, that folks should be able to see their rates adjusted down after they lock?

Or is that a separate provision? Typically a float down is a one-time option where let's say that you were to lock in at two and a half percent today and rates dropped another quarter percent. You get one option to float down and only some lenders have it.

And then once you choose that, you're done. Here's the bottom line. I think people get really worried about, boy, I'm going to lose an eighth or a quarter. Remind yourself, we are in the lowest rates in all of history. If you get two and a half or two and three eighths and it drops to two and a quarter, be so happy you got your two and three eighths.

Don't worry about the eighth of a point you lost. Mortgage expert Dale Vermilion with us today. This is MoneyWise Live.

Your host is Rob West and we'll be back with lots more after this. Many people adopt an attitude toward marriage and finances that it'll all work out somehow, but sadly it often doesn't. Financial woes can devastate a marriage, but there is a better way. God's Way. Money and Marriage God's Way by Howard Dayton will help you discover God's approach to growing your finances, strengthening your relationship with your mate, and cultivating Godly joy. Money and Marriage God's Way is available when you click the store button at MoneyWiseLive.org. If you have money in a retirement account or just a general investing account, you know the stock market can sometimes be like a rollercoaster, but it is possible to enjoy both profit and peace of mind in investing no matter what's happening in the market. You can see a short video webinar on that topic at SoundMindInvesting.org. Since 1990, Sound Mind Investing has sought to offer financial wisdom for living well. SoundMindInvesting.org.

This is Max MacLean. As a receiver of God's wonderful grace, what kind of attitude should we express? Listen to the Bible from Philippians 2. Your attitude should be the same as that of Christ Jesus, who, being in very nature God, did not consider equality with God something to be grasped, but made himself nothing, taking the very nature of a servant being made in human likeness and being found in appearance as a man. He humbled himself and became obedient to death, even death on a cross. Therefore, God exalted him to the highest place and gave him the name that is above every name, that at the name of Jesus, every knee should bow in heaven and on earth and under the earth. From Philippians 2, listen to the Bible.

It's great for the soul. Hear more at RadioBible.org. Do you feel like your hands are tied with debt preventing you from serving God? If you have credit card debt, Christian credit counselors can help. Through our debt management program, we can get you out of credit card debt about 80% faster while honoring your debt in full. For more information on how Christian credit counselors can help, visit Christiancreditcounselors.org. That's Christiancreditcounselors.org, or call 800-557-1985, 800-557-1985. Well, we talked with a lot of guests throughout the year, but whenever we want to talk about mortgages and interest rates, we only go to one guy. It's this guy right here, Dale Vermilion.

Rob? Dale, we're talking about the incredible demand because of the historic low interest rate environment that we're in brought on by the coronavirus pandemic. And the Federal Reserve has basically said, we're not even thinking about, thinking about raising rates. So it's not going up anytime soon. And as you said in our previous segment, it's putting a real strain on the mortgage industry, right?

It really is. It's incredible the capacity issues that lenders are dealing with right now because the volumes are just so high. So you really have to go in with a mindset of being very patient, understanding that, and the more prepared you are again, the faster that loan transaction is going to move.

Yeah. Now, for somebody who's looking at the traditional 30-year mortgage and they're seeing and hearing rates of two and three quarters, maybe a little bit higher, a little bit lower. Is that a rate that they're going to have to expect to pay points to get or should they be able to get that without points and just paying the traditional closing costs?

You know, it really depends. You can use points to buy down your interest rate at any time in a transaction. So when you see the two and three quarter percent rates, typically, they're showing the interest rate, not the APR. The APR is typically higher than that because the points are added to it. So if you see a two and three quarter, you might be paying actually closer to three percent when all is said and done. But you can buy those rates down if you're going to be in that home and you want to make, you know, get the lowest rates you can because you're going to be there for a long time. It's really good to buy down those points because you're going to make that money back tenfold over time.

Very good. And let's go over the rules of refinancing just to make sure folks understand even in this low rate environment, they can make some mistakes by extending the term, paying too much in closing costs. What would you have people to know if they're considering whether a refinance is right for them? Well, look, here's the deal. Rates are at historic lows.

We've never seen them at this rate. So if you can get anywhere from a quarter to a half percent reduction, usually a half a percent is kind of the number that I look at as the minimum that usually is going to work. You can look at reducing your term and your payment both at the same time.

And we talk about this every time. You never want to re-extend your term on your mortgage. That's just wrong use of your funds. It's not good stewardship. You want to get out of debt as quick as you can.

The Bible is clear about that. So when you go in, if you see a half a percent less than where you're at right now, start looking and start digging. Talk to multiple companies.

Remember, Proverbs 24-3 says, by wisdom houses built and through understanding it's established. You want to talk to multiple different lenders, your bank, your current mortgage lender, and then go online to places like Bankrate and look at what's out there and make a couple of calls. Just don't apply at four different places.

Start with one, get an offer, and then start to compare from there. Dale, I don't want to drag you into something that you're not, but I have to tell you there are more houses for sale in my neighborhood than I've ever seen, and I've been there for almost 35 years. I'm starting to wonder whether it's us, but I'm going to blame it on the market conditions instead. But two people that I know of have actually gotten more money for their house than they were asking.

What's going on there? You know, it's a very strange market right now, Steve, because we're actually starting to see in a lot of parts of the country where it's moving to a buyer's market and actually people are selling for less and they're willing to do that because of the 40 million plus unemployed people that are starting to be concerned about their expenses. But you do have hot markets like Atlanta and other places where the demand has been so pent up for so long and now houses are available, people are just snatching them up as quick as they can. I think that's going to be for a short period of time, but because of the low rates, people figure, you know what, I'm going to make it back on the other side with the lower rates. So we're seeing some of that in certain parts of the country. Now, you've mentioned that these are the lowest rates you've ever seen. Are rules that have been in place for decades actually being changed now? Do you have to look at the market totally, in a totally different way?

No, I think that fundamentals are always fundamentals. You want to reduce your term to the shortest term you could possibly get. You want to make sure you do a budget before you ever do anything in a mortgage transaction. And follow the rules of savings. Make sure that when you go into that mortgage transaction, you remember that the benefit is you can lower payments, you can lower costs, you can make sure that you're reducing term, you can potentially gain tax benefits in the process. And you also remember when you refinance, many times you're going to get an escrow refund of your current escrow because it's included in the new loan.

And that's going to come afterwards. That can build a reserve for your family to really protect them for this crazy market we're in today. Wow.

Okay. Great information. Dale, going back to refinancing for a moment, let's talk about the process of where folks should go, how they should begin to explore these rates. Obviously, not all lenders are created equal, not all charge the same closing costs, not all have the same rates. So if you are the average consumer wanting to pursue this, they haven't thrown the common sense rules out the window. They are going to be there for five years.

They are committed to making sure they don't extend the term. They're not going to pull a bunch of cash out unnecessarily, and they can get at least a half a point to a point reduction in an interest rate. They're ready to start shopping.

Where do they go next? So the very first thing you want to do is just educate yourself on the marketplace. Bankrate is a great place to do that, where it'll show you what the national average is. It'll show you what rates are running with different lenders. Always check with your local bank that you can normally work with. Always check with your existing mortgage lender if you currently have a mortgage loan because many times they can do it a little bit cheaper for you because you're not going to have to pay some closing costs.

You might with others. But what I always do is once I've checked those and I've checked online, try one or two online lenders that you can contact. See what kind of rate quotes they give you. Make sure that you understand that you're not going to know what your rate is until you have had your credit pulled, you have verified your income. Those two things are critical. A lot of times what happens is we get a rate quote and we think it's good, but we haven't verified anything, and then it changes later.

Remember, no lender can give you an accurate quote until you've provided those two primary things. Okay, very good. So you want to have all of your ducks in a row. Let's talk though about the person you're working with.

This is not just putting in an online application and everything happens in the background. You're actually going to have to work with a real human being that's going to take you all the way through the process toward closing. How should you factor in who you're doing business with?

Yeah, that's such a great question. Look, we work with mortgage companies, but at the end of the day, the individual that you're working with is the representation of who that mortgage company is going to be to you. So it's really important you not only check out the credentials of the lender and make sure that they have great credentials, great online reviews, all of those kinds of things, but you really want to know about your loan officer and you want to make sure you're working with somebody who's experienced, who's knowledgeable, and who is high integrity. That's the key.

Somebody you feel comfortable with that has given you a straight shoot on everything they're talking about. That is really, really important. Yeah, no question about it. Well, Dale, we've covered a lot of ground today. This is an incredibly historic environment that we're in right now. We're so thankful that you were here to help us navigate that. I know your book is a great resource.

Steve will give that information in just a moment, but just a few seconds left. What would you like to leave our listeners with today? Ephesians 5, 15 to 16 is perfect for right now. Be very careful in how you live, not as unwise, but as wise, making the most of every opportunity because the days are evil. I mean, we are in a lot of turmoil right now. There's a lot going on.

Make a good sound decision for your family and make sure that you back yourself up and build security in what you do. We always learn so much. When Dale Vermilion joins us on the program, you can find his book, Navigating the Mortgage Maze, The Simple Truth About Financing Your Home. When you go online, wherever good books are sold, as they say, you'll find this book, Navigating the Mortgage Maze by our good friend, Dale Vermilion. You're listening to MoneyWise Live with Rob West.

I'm Steve Moore. We're going to take a brief break and then we'll be back with more MoneyWise Live. Many people adopt an attitude toward marriage and finances that it'll all work out somehow. But sadly, it often doesn't. Financial woes can devastate a marriage, but there is a better way. God's Way. Money in Marriage God's Way by Howard Dayton will help you discover God's approach to growing your finances, strengthening your relationship with your mate, and cultivating Godly joy. Money in Marriage God's Way is available when you click the Store button at MoneyWiseLive.org. Hebrews 4-12 says, for the word of God is quick and powerful and sharper than any two-edged sword.

Here's Beth Moore with a quick word. I want you to see with me Exodus 33. This is a portion of scripture in the followup to Aaron and the children of Israel sinning so heinously over the golden cap while Moses was up on the mountain with God receiving the law and the tablets. He comes down and of course it was not just the sound of praise and worship, it was the sound of merriment. It was the sound of false worship.

So of course God is in a stew. And he says to him at the very beginning of Exodus 33, I tell you what, I'm going to keep my word to you. I promised you a land of milk and honey and that's what you're getting. So I'm going to send you into the Promised Land. I will send you with protection. You're going to have an angel go with you. I'll send you on your way. You're going to have every promise kept to you that I made because it was based on my faithfulness and not yours.

But this I will tell you, I am not going with you because if I go with you, I may kill you. I've laughed and thought any of us who are parents can sort of understand a little bit of that feeling. I can remember times when I suggested to one of my children, perhaps now would be a good time to lock yourself in your room because I'm coming for you. And we understand a little of that concept.

Right now it would be a good idea for us both to have time out because I'm about to come and snatch you ball headed. I mean we're there. We are there.

And that's exactly where they were. You've been listening to A Quick Word with Beth Moore. Join Beth for the online teaching experience releasing September 15th at BethMoore.org.

Keep listening for another quick word with Beth Moore. Do you know if you have enough? Enough money? Enough house?

Do you know how much is enough? If not, Ron Blue can help with his book Master Your Money, a step-by-step plan for experiencing financial contentment. Learn how to save, invest, and give wisely. How to create a long-term financial plan and how to get out of debt. You'll find it all in Master Your Money by Ron Blue. Available when you click the store button at MoneyWiseLive.org. Hey, thanks for staying with us.

It's MoneyWise Live. Your host is Rob West. I'm Steve Moore.

And we have a bunch of calls, so let's dive right in. Davenport, Iowa. Hi, Jeff. What's your question for Rob West?

Hi, Rob. We went to a dinner where a person was promoting fixed annuities with life insurance companies, I believe. And they showed graphs where it's guaranteed that you would not lose any of your investment. And it would only go up three to six percent a year unless the market did extremely well, in which case you would get a higher return than the three to six percent. But generally, three to six percent would cap it, but they said you'd never lose any money and then there would be no fees associated with this.

Does this sound along the level? You had me until you said no fees associated with this. You know, one of the the challenges of these is they usually come with high fees.

They're complex, so most people don't understand them. And you can end up generating some significant taxes. Now, what's the benefit? Well, they don't have contribution limits, so you can put a bunch of money in. They often will grow tax deferred and it can have these floors, if you will, where you're not losing money, but you get a percent of the upside. My preference, though, Jeff, for most people who are just trying to save is to eliminate all of those fees and commissions, keep things very simple and invest in a diversified manner where you capture 100 percent of the upside and the downside. But you're counting on a proper allocation based on your age and risk tolerance and time horizon to really work in your favor. And, you know, unless there's some other purpose, you don't have a retirement plan available to you or, you know, you need some other component in here or you're just completely risk averse and you want an insurance company to handle this for you, then I would rather you go a more traditional route, just be a disciplined, systematic investor investing for the long haul. And, you know, that's where most people build their wealth over time as opposed to getting into these complex products with all the fees and commissions associated with them. That's just me, Jeff. I mean, there's a lot of people that would probably take issue with that and could show you all kinds of graphs and charts and illustrations as to why this is in your best interest.

It's just for me, I like to keep things simple and I don't like to pay a lot in the way of fees and commissions. I agree. And, you know, my dad was the same way. The best year he ever earned was just under $25,000 teaching school. And yet when he died at age 95, he was almost up to a second million just by investing. I mean, he'd read the prospectuses all the way through and call this broker and his broker would have to dig them out and figure out what he was asking. But at any rate, he did really well. Yeah, well, I can imagine. And I think that's really the way I'd like to see most people invest because it's not complicated.

It plays on this idea from God's word on steady plotting where you're just steady plotting over time. And, you know, we're not worried about all the complexities inside one of these products. You know, oftentimes when they say no fees, it's because they're basically built into the policy in such a way that they reduce the amount you could have earned.

But at the end of the day, everybody has to get paid and that's how these things are built. So I'd probably go a different direction. If you don't have an advisor, Jeff, you could find one in your area there in Iowa by going to our website MoneyWiseLive.org. Just click on Find a CKA and I'd interview at least two or three before you make a decision. Jeff, we appreciate your call, buddy. Thanks very much. Greenwood, Indiana. And Karen, how can we help you?

Well, good afternoon. My husband and I are coming to close retirement years and he's 65, going to turn 66 later this year. So we have been contributing to a traditional IRA and we're wondering if we should continue to do that this last period of time, predominantly for that tax deferment kind of thing. But does it still make sense for us to do that in this kind of a market which could change? Yeah, I think the key is that, yeah, you can take advantage of the tax benefit. It gives you the way to continue to put away money that you'd have available down the road. And, you know, at the end of the day, you know, although the tax environment could change, if you don't need this money right now, it's a place where you can park it unless you have some other plans for it, additional giving or lifestyle related or something like that. At some point, though, you'll likely reach what you all might deem as a financial finish line just to say, you know what, we have saved enough. And, you know, at this point, we don't have a need to continue to save and therefore we're going to increase our giving or you may decide to continue to save and use this as part of your inheritance.

That would certainly be up to you all. But I don't think there's anything wrong with you all continuing to contribute as long as you're able to and you don't have a need for the money. Right. And then once he stops working, we're not able to contribute to it anymore.

Well, that's right. You do have to have earned income. But, you know, it used to be that once you got to 70 and a half, you could no longer contribute to an IRA, even if you had earned income.

With the new SECURE Act, that rule no longer applies. But you do have to have the earned income. OK, well, we run into having to pay taxes on, you know, between his pension and Social Security. Will we have to pay taxes on those when we start taking money, drawing money out? Yeah, it just depends upon if you have any other income or what you have. You can visit the Social Security's Web site and get a good bit of information on this SSA.gov. But if you're drawing out of the traditional IRA, obviously that would be taxable.

And then depending on any income you earn, a portion of your Social Security may be taxable as well. So it'd be a good idea to do some planning around that, perhaps set aside a time to visit with the Social Security Administration and do some planning with them. They'll be very helpful. Karen, we're going to have to let you go, but we appreciate your phone call and wish you and your husband the very best. Thanks so much. You're listening to MoneyWise Live, a reminder that today's program is prerecorded.

Don't try to call in, but also please don't go anywhere. We have lots of interesting questions coming up, and one of them just may be yours. We'll be right back. How should we as Christians think about investing? What if we could invest our money in a way that aligns with what we believe? At Eventide, we believe it is possible to love God and love our neighbor in the very practice of investing. We design investments for performance and a better world so you can invest for the future with a sense of wholeness and purpose. We call this investing that makes the world rejoice.

More information is available at investeventide.com. Christian Health Care Ministries enables believers to show love for one another by sharing each other's health costs. Through CHM's voluntary health cost-sharing programs, members uplift each other spiritually and financially. CHM is an eligible option under the Affordable Care Act and a Better Business Bureau accredited charity.

Interested? Learn more by calling 800-791-6225 or online at chministries.org. Hi, my name is Lyle, and I'm a Worship and Media Arts major at the Moody Bible Institute. The Moody Radio Verse of the Week is found in Psalm 127, verses one through two. Unless the Lord builds the house, those who build it labor in vain. Unless the Lord watches over the city, the watchman stays awake in vain. It is in vain that you rise up early and go late to rest, for he gives to his beloved sleep.

And that is Psalm 127, verses one through two, the Moody Radio Verse of the Week. Okay, two raisins, one cracker, and a single almond. Yep, that's my foot pantry. All of it? We laugh, but sometimes Christians feed themselves spiritually the same way.

Sparse. Why not take in something healthy? Today in the Word is a daily dose of Scripture and application. A fresh topic or book of the Bible every month. Plus, it's available in three flavors, print, podcast, or email, all free.

Make the healthier choice at todayintheword.org. God cares a great deal more about our money than most of us imagine. In fact, Jesus says more about our use of money and possessions than about anything else, including both heaven and hell. In Managing God's Money, author Randy Alcorn breaks it all down in a simple, easy-to-follow format that makes it the perfect reference tool if you're interested in gaining a solid biblical understanding of money, possessions, and eternity.

Managing God's Money is available when you click the Store button at MoneyWise Live. With SRN News, I'm John Scott. A police union leader says the officers involved in the suffocation death of Daniel Prude in Rochester, New York were just following their training when they put a hood over his head and pinned him to the ground for two minutes before noticing he wasn't breathing. He says the officers were in a difficult position trying to help someone who appeared to have mental illness.

He says they didn't intend to harm Prude. The U.S. unemployment rate fell sharply in August from 8.4 to 10.2 percent, the Labor Department says. Employees added 1.4 million jobs. The stock market ending a second day of turbulent trading with more losses, but managed to recoup some lost ground by the end of the day. The Dow had actually moved into positive territory in the last hour before the closing bell. The Dow did drop 159 points.

The Nasdaq was off 144. This is SRN News. By now you recognize that music.

Yes, indeed. This is MoneyWise Live. Your host is Rob West.

I'm Steve Moore. If you hear a phone number mentioned today, please ignore that phone number. Today's broadcast is a reprise edition of the program, if you don't mind. So we're not in the studio taking calls, but I think the upcoming information will help you and bless you and make you a wise steward of what God's given you. Waynesville, Missouri. Hey, Jim, what's on your mind?

Hi. Yes, I'm in the Army and I am moving with my wife and our eight children to just outside of Tacoma, Washington. So we're moving from one of the lower housing prices area to like one of the highest. And I'm just wondering, we're supposed to be there for about two to four years.

And we're trying to figure out if we should rent or buy because we're not able to move on post because they have eight kids and they don't have houses big enough for us. Wow. You are very blessed. I'm sorry. I didn't mean to cut you off. Say that last part again. I just was wondering what your thoughts on that.

Yeah. Well, it's the two to four years, Jim, that would cause me to say immediately you need to rent. That's just not enough time, given the cost to purchase a home, the cost of the transaction, to be able to recoup that, especially given that the housing market doesn't always go up. And we're in a very hot market right now, which means we could see in many parts of the country a cooling of home values, meaning certainly level off, if not a slight dip, depending on what happens over the next four years with regard to the economy.

And when you add on top of that the cost of the transaction, you're likely going to be underwater on that. So unless you were just going into an area that was very difficult, where rents were up very high, I think you would be much better off at this point, you know, renting given this short timeframe that you've got. My producer is telling me that there is one group that you ought to check out called vethomeownership.com. It's run by a group of realtors who are themselves veterans and they would be able to share any specific financial situations or opportunities that might be specific to veterans. So that's vethomeownership.com.

But other than that, the short timeline is what's got me concerned about you buying. And Jim, you probably with eight children, this hasn't happened overnight, so you've probably struggled a bit over the years having a large family as far as housing is concerned. And I would urge you to check with local churches in the area. They would have, I trust, maybe an open heart for someone like yourself moving into the area, perhaps looking for a home church.

And they would, you know, again, I think would feel some compassion for you. And maybe there's someone in the church that has a house that's a little larger that could handle a family the size of yours. So you might want to call or contact a couple of churches once you get to Tacoma. But we wish you the very best with that. We will keep you in our prayers, Jim and his family, as they move from a military post in Wayneville, Missouri, all the way to Tacoma, Washington.

Continuing on Ashland, Ohio, Wes, what's your question for Rob? I've been reviewing my records for my retirement funds. And I noticed that almost every time I've sold off a fund to reinvest it in another fund, even if it's within the same fund family or company, the sale shows up at a much lower price per share than what was quoted at the time I decided to sell. And this has happened with several different companies. Is this a sneaky way of dinging folks who want to sell off their shares and buy another shares or something else?

Yeah, not necessarily, Wes. You said the word fund. So I'm taking that it's a mutual fund. Is it inside a 401k or just at a brokerage firm?

At a brokerage firm. Okay. All right. Very good.

Okay. So basically, what's likely happening here, remember, mutual funds are sold at what's called net asset value. And so they don't trade like a stock where you can see every tick up and down when the markets open during the day, and where you can set a limit order to say, I want to sell at a very specific price and get out. When you decide to liquidate your shares in a mutual fund, you get the net asset value at the close of business that day, they calculate all the total outstanding shares, and factor in the price of each share, and then they give you your pro rata portion, which if you sell on a day, the market's headed down, you're looking perhaps at the day before closing price and perhaps it's lower the next day. The other thing that could be going on is there's two types of mutual funds, you have what are called no transaction fee funds, and then you have others that, which is the majority of them that are subject to a transaction fee.

So there could be a transaction fee that's being imposed on these, it's likely the case where every time you sell or buy, that transaction fee is kicking in, and that's being deducted from the proceeds of the sale. So it's probably one or two, one or both of those issues that are going on. The last one could be a load. So if these are not no load mutual funds, there could be a load of some kind that's imposed on the back end, that's less likely. But any one of those three could be going on. Okay, well, that sheds a little light on it. Maybe I just always buy on the wrong day or so. Well, I would check your statement and just see what's going on. I mean, every transaction fee or any loads that are being imposed should be there in the details.

And so take a look at that and you should be able to figure it out, assuming it's not just the result of the net asset fee. Thanks, Wes. We appreciate your call today very much. Rob, what do you say we try to do a couple of emails here? All right. That sounds good.

All right. Let's begin with one from Skip. He says, Dear Rob and Steve, I have $125,000 in cash. How can I invest it in a CD, a bank or Vanguard?

Yeah, he's probably been listening to the program. Skip, you can invest this in a CD very easily. In fact, over $25,000 going into a CD, you're going to get the very best rates. I would start by going to bankrate.com, bankrate.com and put in the amount of the CD, the duration you're looking for.

You're looking for 18 months, two years, three years, five years, and then see which banks with FDIC insurance are offering the most attractive rates. You'll find a number of them and shouldn't be any problem linking that new bank, probably an online bank, to your checking account. You'll be able to just ACH transfer the money in, initiate the CD, set up your online account, and you are off to the races.

Now, he has an interesting follow up here. He says, won't depositing $125,000 in cash create Homeland Security questions? Well, there are some new rules that came out several years ago, actually a number of years ago now, related to know your client, where when you're making certain deposits, they have to ask questions. But it's not, these questions aren't going to be voluminous and it won't create any problems.

You'll just have normal questions that any financial institution would ask when you're opening an account. Okay. Next email is from Kim. She says, we just sold our house and paid off all our debt. When we tithe the profit from the sale, does it all go to our church or can we quote, spread it around?

Yeah, Kim, great question. The key is here, the profit from the sale, when we're talking about a house, make sure you're looking at the true profit after the expenses. Of course, subtract out the initial purchase price and any improvements. But then I would see this as your increase.

So I'd treat it just like any other income you get and tithe 10% to your local church. Okay. Sounds good to me.

It always sounds good to me because Rob West really knows his stuff. He's the president of Kingdom Advisors and he joins you each weekday at this time taking your questions at 800-525-7000. Something I always forget, thanking those behind the scenes, Amy Judy, and particularly Rich for his assistance today.

We'll be right back. Do you know if you have enough? Enough money? Enough house?

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Splitting Heirs will foster a real appreciation for the precious resources that God has entrusted to you. And it's available when you click the store button at MoneyWiseLive.org. And welcome back to MoneyWise Live. That guy over there, the good-looking one, tall, dark, handsome.

Yep, that's Rob West. I'm Steve Moore. Let's just leave it at that. We're glad that you... No, you can keep going. No, I don't... No, no, I'm... No, no. But Ann and Nancy, we're coming your way. Stick around, please.

But next, Chicago, Illinois. Cynthia, how can we help you? Oh, yes. I'm calling. I need to revise my question.

In a nutshell, I'm trying to determine whether or not I should fix up my home or just sell it. It needs about $30,000 worth of work, major work. So that's my question. Well, just so you know, Cynthia, when you revise your question, there's an extra charge for that. So we're just putting that out there up front.

And it happens to be exactly $30,000. Right, right. Exactly. So tell me about this home in terms of...

I see here in my notes that the home is paid off. Is that right? Correct. Okay.

Congratulations for that. Are you retired? Yes, I am.

Okay. And what are your plans? Do you plan to stay in this home for the foreseeable future? I would like to, but just listening to other people, they just say, you know, why bother fixing it up? Just get rid of it. Don't put the money into fixing it up.

Yeah. Yeah, especially if you're not planning on staying in it. You know, if you've said to me, Rob, I'm retired, I want to downsize, I want less maintenance and upkeep, I want to perhaps get rid of the yard work, or I just don't need this much space. You know, then it's a matter of, okay, we've got a home that's paid for, and we just want to maximize the value of the home when you sell it. And you're going to want to get some advice from a professional on what things you should put money into and what things you shouldn't. Because $30,000 is not an insignificant amount of money. That's a lot of money you'd be putting into this home. And it could be that many of those things are not the best things to put money into right before a sale.

So give me an idea. Is this one major repair or improvement, or is it a lot of little things? Well, little things. One is the chimney needs to be replaced. The other thing is the garage is falling apart. And it needs to be torn down and or replaced. Okay. So it's a detached garage. Is that right?

Right, right. Some plumbing issues, not big issues, but just some repairs. Okay, well, I think the first question is, do you really see yourself staying put for the foreseeable future? Or do you really have a sense that you'd like to go ahead and sell and perhaps downsize or relocate? Do you have real clarity on that?

I do not. And the thing is, is I don't know if I did move. I don't know where I want to move to. You know, what I want to buy.

I just I'm just clueless on moving forward. And just don't know, you know, whether if I want to stay in Chicago or just really concerned about my stability, if I move, you know, if I go ahead and sell it and don't do the repairs, am I going to be able to find something nice and affordable? Or I don't want to go into having to pay a mortgage.

Yeah, no, that makes sense. Let me ask you this. Is your income stable in the sense that you've got enough to meet your bills with perhaps a little bit left over every month? And then secondly, how would you pay for whatever renovations or repairs you do when it come out of savings? Or were you planning on getting a small loan?

I would pay for it with a loan. And tell me about your income. Do you have enough income every month? I do.

OK. All right. Well, the good news is it sounds like you have a good bit of flexibility because you followed biblical principles. You're living within your means.

You've obviously been very careful and wise in your use of debt, given that you own your home completely. And it sounds like you have a lot of flexibility, which is what happens when we live by God's principles. So I think at this point, I would do a couple of things. Number one, in earnest, be praying and asking the Lord for wisdom on this decision to sell and relocate or perhaps downsize. Number two, as you start to get an idea of where you might like to go, I'd go ahead and start looking at the various options for housing and considering what you could get out of your place with perhaps limited improvements, those things that are critical and perhaps things like the garage that the buyer may want to do themselves the way they want to do it.

Perhaps you give a credit for that, but you'd be able, with the help of a realtor, a professional in your area, to get a good idea of which things you do now, which things you wouldn't do and what you could get in terms of a selling price. You'll take that information and really begin to explore what options you'll have and where you might like to go. So I would do those things as my two next steps.

One, begin praying that the Lord would give you wisdom and two, contact a realtor, a professional who's well versed in your area to come out, evaluate your property, tell you what they could think you could get in a comparative market analysis and which repairs or improvements to make prior to that sale. And then you'll take that information and begin exploring this further and call us back along the way. Cynthia, I know this is a big decision for you. We'd love to help you process it, but I think those are the two next steps. And Cynthia, wouldn't be the worst thing in the world if you actually asked two realtors to give you their thoughts.

That's kind of what they do and you won't hurt their feelings if you decide to go with one over the other further on down the road. And we're going to have to let you go, but we hope that helps. Thanks so much. Claremont, Florida. Nancy, how can we help you? I am wondering about something. My husband does not believe in life insurance at all. And my first husband died and he did have life insurance. And also one of my children died when they were a child, when they were very young. So I got life insurance with my second husband. He was very reluctant and we're paying a high premium because we got it when we were 70. And paying a lot.

I'm just wondering about two things. Is it beneficial to your grandchildren to buy life insurance for them? And I have seen ads for this. I think it's a company called Big Lou who can get you life insurance that is cheaper because we are paying quite a bit for life insurance.

Yes. Well, Nancy, I appreciate that. And, you know, I think, I mean, our general rule is insurance is a very important part of a wise steward's investment strategy. You know, if we go back to First Timothy, we see very clearly we're to provide for our families. And I believe part of that provision is offsetting risk. Our trust is squarely in the Lord.

We're not trying to take that away from anything. But beyond that, we say, OK, as a steward and being wise, what do we need to do to manage God's money? And part of managing God's money is offsetting a risk, a risk of the home having a major problem and not being able to afford its repair, a car accident. And yes, in the event one of you, you or your husband is called home before the other, is there a hardship placed on that person because they're dependent upon your income or there's going to be an increase in expense as a result of that person's death? And if so, that's where life insurance, I think, can provide a very appropriate level of offsetting that risk.

But I think we need to have a reason for it. I actually prefer saving outside of insurance policies in other more traditional means where we're not paying the high cost of the mortality expense and the other fees associated with whole life policies. So I think the first question is, to the extent you have life insurance at age 70, why, if it's on yourself, what's the purpose of it?

And let's just make sure that's a needed expense at this point, given your season of life. And then for grandkids, it's really important to determine the purpose of it again, because, you know, a lot of grandparents will buy it as a means of giving a financial start to grandchildren. But I'd rather them instead of building cash value in a policy like that, I'd rather them start a 529 plan that's going to grow in a tax deferred environment and mutual funds and set them up for college or some other type of investment as opposed to a whole life policy, which, again, typically have high fees. If the purpose is to pay for a funeral in the event that that were to happen with a child, a term life policy would be a better, more inexpensive approach and often as a rider to another policy makes it more cost effective. So those are just generally my thoughts on insurance, why you'd have it. And then for grandkids, I like other options for helping them get a good financial start versus a whole life policy. That's just my general approach.

How does that sound Nancy? It sounds reasonable. My husband, right now we have a very small life insurance policy for, you know, I'm a beneficiary to him.

He's a beneficiary to me. But I went out and got another life insurance policy in case I die before my husband so that he would have a little bit of something to live on because we are this age. And I couldn't believe how expensive it is. It's just terribly expensive. Well, yeah, it's very expensive because again, it's all based on actuarial tables and what the death benefit is based on your age. And it's, you know, the cost, obviously, the older you get, the more expensive it is.

So that takes us back to this question of what is the purpose of it? You know, is it just there to know that that death benefit will be paid? But is the money really necessary or because of your other savings and income, you could take that money that you're putting into those high premiums at this point in your life and redirect them to additional savings, additional giving or perhaps buying a long term care insurance policy, for example, that would cover that risk as opposed to a death benefit that's really unnecessary at this point.

So I think those are all things to think about and perhaps visiting with your financial planner to ask those questions would be good. If you don't have one, you could find one on our website, MoneyWiseLive.org. Just click on Find a CK. Nancy, thank you very much. And thank you again, as I mentioned, for tuning in and for listening and for being a part of the program. MoneyWiseLive is a partnership between Moody Radio and MoneyWise Media, and you are listeners. For Rob West, I'm Steve Moore, hoping you and yours have a wonderful remainder of the day. Then join us again next time.