2021 Mortgage Outlook

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Not licensed in Alaska, Hawaii, Georgia, Massachusetts, North Dakota, South Dakota, and Utah. The pandemic made 2020 an unusual year for most sectors of the economy, and the mortgage industry was no exception. So what might we expect in 2021? More historic lows and interest rates, ups or downs in home sales, and what will a new administration in Washington mean for mortgages? Today host Rob West talks with mortgage expert Dale Vermilion to get some answers. Now we're prerecorded with great questions already lined up, so please don't call in. I'm Steve Moore, the Mortgage Outlook for 2021.

That's next right here on MoneyWise Live. Well, Rob, our good friend Dale Vermilion is author of Navigating the Mortgage Maze, The Simple Truth About Financing Your Home, and it's chock full of information anyone should have if they're even thinking about getting a mortgage this year. That's exactly right, Steve. Dale, great to have you back on the program. Rob, Steve, always great to be with you guys. What an honor. Thanks for having me.

We always enjoy our time with you. Let's start with a bit of a recap, if you will, of 2020. Would you say it was historic for the mortgage industry?

Yeah, no question about that. We saw in 2020, total mortgage originations across the nation were almost $3.4 trillion. That was the highest since 2003, which was a record year. Refinances were almost $2 trillion of that. And the amazing thing was most of that was in a seven-month span. So there was a 91% increase in refinances in 2020 over 2019. Massive, massive growth.

So it was definitely a historic year. Yeah, I think mortgage companies are probably still reeling and trying to figure out what direction is up. How would you describe the state of the mortgage industry today, Dale? You know, it's doing better now than we were doing at the end of 2020 and middle of 2020 because literally the low rates caught us by surprise.

Volume was at the highest levels ever. Capacity was crushed for most lenders. So for consumers, it was hard to get a loan and get it fast in 2020. 2021, I think lenders are in a much better position.

We had a little bit of a lull during the holidays that allowed them to catch up a little bit. They've hired a lot of new people into the industry that are now trained and able to do it. So I would say today, lenders are in a much better position than they were in 2020 to be able to handle requests from customers.

Yeah. Where are our interest rates now, Dale? And where do you see them going in 2021? It seems like every time I saw the headline, rates reach a new low, two weeks later, I was seeing it again. Have we reached bottom?

And where do you see us moving from here? Well, we hit the prediction that I made that I said I thought rates would get under 2%. I've now seen rates under 2% in the mortgage arena, which is absolutely unheard of.

That's free money. The Fed just announced on January 27th that they are going to leave the Fed funds rate unchanged. So it's going to stay at 0 to 0.25%, which is great news for us. That means we can anticipate, probably in the first and second quarter for sure, we're going to continue to see low rates.

We think that quantitative easing is going to continue because of the economy and the pandemic and all the other things. So I anticipate this year that through the first half of the year, we'll continue to see these historic rates. You know, 19 million people, it's projected, if still not refinanced, that could and improve their position. It's probably a good idea to do that right now because we think by the second half of the year, rates could start to rise.

Interesting. Now, you mentioned you've actually seen rates below 2%. Let's talk about the average borrower. I'm thinking somebody who has a 750 credit score. It's good.

It's not the best, but it's still good. They're going to put down 20%. They have good documented income on a 30-year loan.

What might they expect right now? You know, you're probably going to be in the mid 2s without any problem to high 2s. It's going to be under 3% still, which is amazing numbers for a 30-year loan. That under 2% was based on a 15-year term. And, you know, we always recommend that you want to get the shortest term you can because that's what God calls us to, is to be out of debt as quickly as possible.

Yeah, and Dale, just about a minute left. For those who are listening, they're part of that 19 million that you said are candidates to refi. Tick off the principles, the guidelines they should be thinking about to determine whether they're actually a candidate. Well, just do a calculation based on where your payment is at right now for your existing term at an equal loan at that same term in today's marketplace. The key is don't just take and calculate a 30-year term because if you've got 22 years left, of course it's going to lower your payment, but it will affect your long-term payback. What I want you to look at is, based on the rates today compared to where I'm at right now, if I were to calculate that out of the same exact term at that rate, what would my payment be? If it's going down, you want to look at refinancing immediately. That means you can save money and not extend term, and that's what you want to do. Whenever we have questions about mortgages, this is the guy we turn to, Dale Vermilion, author of Navigating the Mortgage Maze, the simple truth about financing your home.

The other simple truth is that music means we have to get out of here, but we won't be gone for long. Stick around. This is MoneyWise Live. Hey, if you're a young couple, newlyweds perhaps, and you're looking at mortgage rates, well, what should you do?

Do you want to miss this? It's maybe the last time you see rates this low, but who knows? Well, if anyone knows, it's probably Dale Vermilion, the author of Navigating the Mortgage Maze.

He's with us today. Not only does he know stuff about mortgages and money and interest rates, but he's also a great brother in Christ, and it's always a great blessing to have him on the program. Just before the break, Dale, you were saying that 2020 was a historic year for the mortgage industry, and where we find ourselves today is still at historically low interest rates. The mortgage industry had an opportunity to catch up a bit from that incredible backlog that was generated last year, and that took place over the holidays.

So now we're ripe for another round of refinancing. Obviously, something has changed here at the start of the year, and that is a new administration in Washington. How might that affect the mortgage industry, if at all?

Yeah, great question, Rob, and we don't yet know. Any time you have a change in government, particularly when it's a complete change in some of the mindset and who's in control, it's going to affect the economy in different ways. Now, the one thing that we do think is going to happen is the CFPB, the Consumer Financial Protection Bureau, which was put in place back during the mortgage meltdown in 2008, we do believe that under this new administration that they're going to tighten up quite a bit. It was pretty lax and pretty loose underneath the Trump administration. I think under the Biden administration, we're probably going to see it get a little bit tighter.

That's going to create a little bit of tightness in some of the programs. What we also know is that there will be a commitment to affordable housing. That's going to change a little bit.

Those are the major things. I don't think we'll see much change in interest rates or other things that would pertain to consumers. Again, the government wants to keep the economy in good shape, and mortgage rates are a key factor of the economy. With everything else happening, with the pandemic and all these things, I think they're going to stay stable for quite a while.

Yeah, that's really helpful. Obviously, we're still grappling with the pandemic and the impact that's having on people being able to pay their mortgages. If they're in a sector of the economy that's been the hardest hit, perhaps they've lost a job, they've had hours reduced, they've been furloughed. Do you believe we'll see any new relief programs coming out of Washington? Well, we've got the CARES Act right now that is the Mortgage Forbearance Act that consumers can take advantage of. If you have a government loan, that's a FHA, VA, USDA, Fannie Mae, or Freddie Mac loan, you can talk to your servicer about that and you get an initial 180-day period where you can forgo payments on your mortgage. You can extend to a second 180 days if you're still in a situation where it's affecting you and you can't afford to make your payments.

Ideally, if you can afford to make your payments, keep doing them, but the CARES Act does allow you to have that forbearance and then what they do is they end up putting that on the back end of the loan or working it out through different payments after you get through that period. Outside of that, I'm not aware of any new programs that are coming out and I don't know that we actually need any at this point because that really does cover, for most people, the challenges that they face. Yeah, very good. 2020, Dale, as you know, ended with housing starts higher than experts had predicted. Do you see that trend continuing in the new year?

I do. We have such a massive inventory problem right now nationwide. That is the number one challenge we have in the purchase arena is that there's just not enough homes. And therefore, I believe we're going to see a good run of construction for several years now. I think for construction companies, that's great news. For homeowners, the challenge is going to be the cost of the lumber and those kind of things is really high now because of the demand and supply issues. But I do believe housing starts are going to continue to increase. I do believe we're going to see a lot of new construction in the coming two to three years.

And I do believe it's going to help us to start to solve some of this inventory problem. Dale, what should consumers be careful of as they chase these low rates, whether it's buying that first home or refinancing? We want to be prudent and careful looking at biblical principles. We don't want to get in over our heads, even though our good friends at the bank say that we can afford it, we can afford it.

What's your recommendation in that regard? Well, look, the first thing you've got to be careful of is just refinancing, for example, just to get a lower rate. The reason you do it is to get yourself in a better financial situation. That's always got to be your guiding light.

Remember the Scriptures and what they tell you. I absolutely love how God guides us through this and he tells us that we should be very careful how we borrow and how we buy. So the key is to make sure that number one, when you're looking at either buying or refinancing, you're always doing a budget.

That's always the number one thing we talk about. Make sure you can afford that payment. Make sure you're putting a good down payment. Look at your credit score. Know your credit score so that if you need to improve it. You know, sometimes people will jump into a finance or a mortgage transaction when they can actually improve their credit score by 20 or 30 or 40 points very easily and actually get a much better rate when they do it. Look at your credit score beforehand. If you need to make modifications, do that. Then apply for the mortgage loan and be prepared.

Do your homework. Have everything ready and prepared when you talk to that lender. Make sure you've got all your income documentation and all of your financial information with you and compare lenders and rates between different companies. If you do that, you're going to make a good decision and always, always, always avoid extending your term whenever you can. That is the biggest single mistake I think that we make is we extend our terms out and we really don't want to do that because that gets in trouble. Remember Romans 13, 8 says, owe nothing to anybody except for your obligation to love one another.

That's what we're called to. We want to get out of debt quickly. Now, when you say compare lenders and rates, what's the rate I want to be looking at? Is it just the interest rate? It's the interest rate and it's the fees. That's a great question because what happens is we get hooked on these advertisements that will pop up that say, hey, you can get a 1.95% rate.

Okay, but at what cost? You have to ask the question. Okay, that's probably what's called a buy down rate. A buy down rate is where you're paying fees up front in order to get that low rate. The question becomes how much you have to pay to get it and then you've got to calculate that into your savings. So, for example, if I've got to pay $5,000 up front to get this low rate, I'm saving $300 a month. Well, do the math.

It's not hard to figure out. It's going to take you several years to recoup just your costs on that. You've got to make sure you're not making a decision for the short term that's affecting you negatively in the long term because you're not going to be there for three to five years. So, really look at what the cost is in fees for the loan and the interest rate you're going to pay.

Again, calculate it out to determine based on where you're at today what would your new payment be. If you're saving hundreds per month and you can keep your term the same, there's no reason not to do that unless you're paying some absorbent fees. But you don't need to in today's marketplace because there's a lot of low fees, some even no fee programs out there. Dale, obviously you want to shop around. You don't want to just go with the company that's advertising the most on TV. I'm thinking of one in particular right now that seems to be there every time the television is on in my home. So, how do folks go about researching and finding the lowest rate? Is there a website? Should they find a local mortgage broker at their church?

Where do they go? Well, you want to start online with a bank rate or a Zillow or a LendingTree to get comparison of rates and lenders and then get four different comparisons. One from a local broker, one from a mortgage banker, one from your bank or credit union, and then look for referrals.

And if you can find somebody who's a Christian that you trust and you know that not only is going to do a great job on your loan, but they're also going to give back to the kingdom and tithe in that, you're doubling down and you're really making a great decision. I love it. Thanks for stopping by today, Dale. We'll look forward to having you back real soon. It's great to be here. Thanks for having me. God bless you guys.

That's Dale Vermilion. He's been our guest today. You can find his book, Navigating the Mortgage Maze, at MoneyWiseLive.org. Today's broadcast is prerecorded, so we won't be taking any calls. But we have some calls lined up and some great information coming your way that I think you'll find usable at the very, very least. This is MoneyWise Live. I'm Steve Moore. We'll be right back. 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 you 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 on the level? You had me until you said no fees associated with this. You know, one of 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 a hundred 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 this broker would have to dig him 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 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.

Okay. Will we run into having to pay taxes on, you know, between his pension and his 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 website 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 would be a good idea to do some planning around that, perhaps set aside a time to visit with 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. 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 we have eight kids and they don't have houses big enough for us there. Wow. You are very blessed. I'm sorry. I didn't mean to cut you off. Say that last part again. No.

I just was wondering what your thoughts on that. Yeah, 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 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. But 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, 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 notice 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 share 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, 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 market's 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's 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 and put in the amount of the CD, the duration you're looking for.

You're looking for 18 months, 2 years, 3 years, 5 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 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. 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 could keep going. No, I don't. 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. Alrighty. Well, you know, 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 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. There's 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, what I want to buy.

I'm just clueless on moving forward. And just don't know, you know, whether if I want to stay in Chicago or move, and 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? Would it come out of savings, or were you planning on getting a small loan?

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

All right. Well, the good news is it sounds like you have a good bit of flexibility, because you've 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 downsides. 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, okay, 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 will be good. If you don't have one, you could find one at our website, MoneyWiseLive.org.

Just click on Find a CKA. 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. MoneyWise Live is a partnership between Moody Radio and MoneyWise Media, and you, our 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.