Hope SPRINGS Eternal…

This week, we celebrate two very important holidays – Passover and Easter.  These religious holidays are celebrations of hope and salvation – Passover commemorates God’s deliverance of the Jews from Egypt and the birth of the Jewish people as a nation.  And Easter celebrates the Resurrection of Jesus Christ and the birth of Christianity.

Both religious holidays remind us that even in the most trying of circumstances we must always “Hope”. 

This lovely verse about HOPE is by Father James Keller, Founder of The Christophers:

Hope opens doors where despair closes them.

Hope discovers what can be done instead of grumbling about what cannot.

Hope regards problems, small or large, as opportunities.

Hope looks for the good in people, instead of harping on the worst.

Hope cherishes no illusions, nor does it yield to cynicism.

Hope sets big goals and is not frustrated by repeated difficulties or setbacks.

Hope pushes ahead when it would be easier to quit.

Hope puts up with modest gains, realizing the “the longest journey starts with one step.”

Hope accepts misunderstandings as the price for serving the greater good of others.

Hope is a good loser because it has the divine assurance of final victory.

Hope draws its power from a deep trust in God and the basic goodness of human nature.

Hope “lights a candle” instead of “cursing the darkness.”

All of us at Beninati Associates wish you a Happy Passover and a Blessed Easter.  May you always HOPE!

Our office will be closed on Easter Sunday, April 1^st.

National Flood Insurance Program (NFIP): Reauthorization*

(Article published on March 22, 2018) 

Congress is required to periodically renew the NFIP’s statutory authority to operate. On February 9, 2018, the President signed legislation passed by both houses of Congress that extended the National Flood Insurance Program to March 23, 2018.  Congress must reauthorize the NFIP, which is administered by FEMA, before midnight on March 23, 2018. By the time some of you read this, you will know if the program was reauthorized or not.

FEMA and Congress have never failed to honor the flood insurance contracts in place with NFIP policyholders.  If the NFIP’s authorization lapses, FEMA would still have authority to ensure the payment of valid claims with available funds. However, FEMA would stop selling and renewing policies for millions of properties in communities across the nation. The National Association of Realtors estimates that a lapse might impact approximately 40,000 home sale closings each month.   If flood insurance is not available, home closings, where banks require flood insurance, may be in jeopardy and homes that cannot get flood insurance and suffer losses will have no recourse.

A timely, multi-year reauthorization is critical for insured survivors and businesses affected by the devastating impact of last year’s hurricanes and past events that are still under resolution.  It’s hard to understand the logic in holding home owners and businesses hostage to extending the NFIP for such short time frames.  It’s understandable that the work needed to stabilize the program is complicated and needs lots of research to be sure that changes are implemented fairly.  However, policyholders need confidence not only that FEMA can pay flood insurance claims, but also that the NFIP will be able to sell and renew policies to help them protect against future flooding. Flood insurance – whether purchased from the NFIP or through private carriers – is the best way for Americans to financially protect themselves from losses caused by floods.

On April 28, 2018, I hope you will join SoutholdVOICE at an Information Session on this topic at the American Legion Hall on Main Road in Southold.  Save the date and stay tuned for more details. 

*Source: Information from FEMA and National Association of Realtor’s websites and interviews with subject matter experts.

HOUSING MARKET FORCES...IS IT TIME TO SELL?

It’s no secret - mortgage interest rates are going up, the new tax law will hit harder in New York than most of the country, and the tight inventory market is putting pressure on prices.  All of these factors will increase the carrying costs of homes.  For most, a modest price increase in monthly mortgage interest, will not likely discourage a purchase.  For the wealthy, a reduced tax deduction will not likely affect their decision to buy.  For the average buyer, higher prices translate to higher monthly carrying costs, which as long as they are within a manageable range, will not deter a purchase of a home that will benefit the family, give him/her enjoyment and future appreciation.

But will all these forces eventually put enough pressure on the consumer that it will reach a tipping point and turn things in the other direction?  It would be helpful to have a crystal ball – but most of us do not have such forecasting tools!  The best thing to do is assess your individual situation and make decisions that work for you and your family, now.  For example, if you have been waiting to sell your home when the market reaches its peak, you will likely miss it, since only as it moves downward will you know for sure.  So why not evaluate today, where things are at for you and factor in your future plans and see if it makes sense to sell your home now.  If you plan to retire and wish to downsize, consider that as your home goes up in value, so will the home you purchase.  The important thing is that you have liquidity and can go forward with your plan.  If you are thinking of upgrading, see if the current market will allow you to sell and buy another home with whatever your budget allows.

 “Timing is everything!”  The coming months are some of the best selling months of the year.  Many want to be in their new homes to enjoy all, or at least some, of the summer. “About 40% of the year’s sales take place from March through June, according to the National Association of Realtors.”*

Consider how today’s real estate market factors into your plans.   Call us and we will give you an assessment of the market as it relates to your property so you will know where you stand. Then contact your financial advisor, and review your plans and see if it’s the right time to put things in motion. 

We can help you, just call us!  At Beninati Associates, we’re looking out for you!  Our office is conveniently located at the corner of Main Road and Hortons Lane in Southold; telephone is 631 765 5333; email is marie@beninatiassociates.com;  Talk to you soon!!!

*Source: The Wall Street Journal, March 8, 2018, Home Sales Show Signs of Softening, page A3.

Investment Strategy: Diversify, Diversify, Diversify!

A recent article in The Wall Street Journal, featured an investment profile of Sallie Krawcheck, Chief Executive and co-founder of Ellevest, a digital financial investment firm for women.  She was also Citigroup’s chief financial officer and also lead Merrill Lynch Wealth Management. 

She characterized the purchase of a house on the East end as her best investment and the purchase of the bank stock of the firm she worked for as her worst investment.  The home she bought in 2004 in Quogue, with money from stock at Citigroup, is almost double the value today.  The Bank of America stock she bought in 2009 and sold in 2011, returned her only half the value. 

“ ‘The real takeaway, of course is diversity, diversity, diversity,’ she says. ‘I diversified away from Citigroup stock and into real estate.’  Her portfolio at the time was not nearly as diversified as it should have been, she says. Her financial adviser at the time said she could survive a hit to her Citi stock, but so much of her other assets were tied up in equities, too, leaving her far too exposed.”* Diversity is an investment strategy we should all be mindful of, especially in recent weeks with the volatility of the stock market.

The other important investment strategy is timing and “timing is everything!”.  A wise saying, attributed to William Shakespeare, coined in 1599, in his play Julius Caesar.  Buying and selling investments profitably, is a function of timing but none of us have crystal balls to tell when it’s optimum to buy or sell a particular investment. All the more reason to diversify to balance the mix of investments to protect from extreme losses in any one investment category.

If you have most of your investments in the stock market, perhaps it’s time to diversify into real estate?  Perhaps it’s time to explore and diversify?  We can help you with the real estate side of your exploration, just call us!  At Beninati Associates, we’re looking out for you!  Our office is conveniently located at the corner of Main Road and Hortons Lane in Southold; telephone to         631 765 5333; email to marie@beninatiassociates.com.  Talk to you soon!!!

*Source: The Wall Street Journal, March 5, 2018, A House Was Better Than Her BofA Stock, page R8.

SHOULD YOU PAY OFF YOUR MORTGAGE EARLIER?

If you are thinking about retirement in the next ten years or so, you may want to consider paying off your home mortgage earlier.  Certainly, the stock market has offered a way of getting a better return that a bank savings account, but with the recent market volatility, some of your money should be in less volatile investments.  That brings us to paying off your mortgage earlier and saving the interest you are paying on your mortgage, versus putting your money in a bank account that returns far less than your mortgage interest expense.  Most bank saving accounts offer a fraction of 1% in interest.  Even at their lowest point in recent years, mortgage interest rates were 3% and have been going up.  You may want to consider paying off your mortgage earlier and saving the interest.

Here are four ideas on how to shorten the term of your mortgage and save money:

1.                                   1.  Refinance with a shorter-term mortgage.

                       You can refinance your 30 year mortgage to a 15-year loan.  For example, a 30-year fixed-rate

     mortgage  for $200,000 at 4.5%, refinanced into a 15-year loan at 4% five years later, pays off 

     the mortgage 10 years earlier  and saves more than $60,000 (less the closing costs on the           refi). Shorter-term mortgages often carry interest rates lower than their 30-year                              counterparts. Remember, even though you will have a lower interest rate, the quicker payoff          means higher monthly payments. So it’s important to be sure the higher payment works for            you.

       2.Pay a little more each month.

  Just add an extra amount to you regular monthly payment of divide your monthly payment by 12  months and add that amount to your monthly payment for a year.  By doing this  you will make the equivalent of 13 payments in 12 months.  Be sure you indicate that the extra amount is for principal and check that it has been properly applied on your next month’s statement.

       3. Make an extra mortgage payment every year.

   Instead of paying a little more each month, make one extra monthly payment each year. One         way to do  this is to save 1/12 of a payment every month, and then make an extra payment           after every 12 months.  This gives you the flexibility to use the extra savings for something else     if a more pressing expense arises. If you do this every year, on a 30-year mortgage for                   $200,000 at 4.5% you would save more  than $27,000 in interest, and you would pay off the         mortgage four years and three months earlier.

      4. Throw ‘found’ money at the mortgage.                   
  
  Bonuses, tax refunds, gifts, any unexpected windfall, can be used to pay down principal and                     reduce the term and interest of the original loan. An extra $10,000 lump-sum payment on our 
30-year, fixed-rate  mortgage for $200,000 at 4.5% after 5 years, pays off the mortgage two 
years and four months earlier,  and saves more than $19,000 in interest.

    

              Even if you end up selling your home before you pay off your mortgage, you will have more equity in your home and saved mortgage interest.   It’s a strategy worth considering. 

Source:  Tribune Content Agency, LLC