Not sure what to do with your tax return? You can use the money to make some much needed upgrades to your home! Whether you are thinking of selling your home or planning on staying for a while, these suggestions for using your tax return for home renovations are sure to add value to your home.

If you have less than $1,000

Focus on the smaller details of yourhome. Change out that mailbox that may have been hit a time or two (we won’t tell). Change the color of your front door, or even upgrade to a brand-new door! Be prepared to pay a little more if you have your eye on a steel front door. Give your home a fresh coat of paint, whether it’s the actual home or just the shutters or trim. Treat yourself to a new lighting fixture in the kitchen. Switch out all light bulbs to more efficient, energy saving bulbs; maybe even upgrade to a few smart light bulbs, like this starter kit for $179.00. You can’t renovate an entire kitchen on this budget, but you can add a nice backsplash, update cabinet hardware, or even get some new energy efficient appliances. You could even hire professionals to come clean the exterior/interior of your home. You’d be surprised the difference clean carpets and power washed driveways can make.

If you have $2,000

You can do a lot with this budget. Pick a nice new color for your interior walls, maybe adding an accent wall here or there. Replace those eye-sore pieces of furniture or rugs. Upgrade your kitchen counters to something more modern. You could install several smart home technology systems, such as smart thermostat, smart doorbell/security cameras, smart shades, and phone or voice controlled light switches. Open some space by knocking down that wall that’s been driving you nuts. If you’re more of a DIY-er, before picking up a sledgehammer be sure to consult with a professional to avoid taking down a load-bearing wall.

If you have over $5,000

Depending on how much you have to spend there is the potential for some pretty big renovations. For lower budgets closer to the $5,000, you could add a deck or front porch. These will not only bring big benefits to you while living in the home but will add value to your home and can be a big selling point when trying to sell. Make some upgrades to a larger bathroom or renovate a smaller one. Sticking to just a few upgrades will keep costs down. If you’re looking to completely revamp a bathroom, it can cost anywhere between $7-10,000 depending on what you want to do. You can change out the flooring in a room or two. Install new windows that are going to help keep costs down.

The kitchen can be a pretty big project but is one of the most used and therefore important rooms in your home. If your budget extends towards $8-10,000, you should be able to afford new countertops, redo cabinets with a fresh paint or stain, add a back splash or new lighting fixtures, and possibly some new EnergyStar kitchen appliances. A kitchen renovation is one that is sure to add value to your home. For more ideas on home renovations that give the most bang for your buck, check out this interview with our Chief Appraiser!

Investing your tax return into home renovations is great way to add value to your home regardless of whether you’re selling soon or not. Use these suggestions to help you decide what you can do within your given budget, or consider other options to help finance renovations. If you are looking to buy a new home, another way to use your tax return is as a down payment.

If you have any questions or want more information about the homebuying process, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the process, click here to get started!

The Consumer Financial Protection Bureau (CFPB) has released new online tools on their “Owning a Home” landing page. These tools are aimed at helping consumers better understand the mortgage process, in preparation for the TILA-RESPA Integrated Closing Disclosures (TRID), or the Know Before You Owe Rule, which goes into effect October 3, 2015.

The new tools are divided into four phases:

Within each phase, consumers can use various online forms and worksheets to learn more about the loan process and their options. Consumers can, for example, explore potential interest rates, based on their credit score, location, home price, loan type, and more. There are also tools that walk consumers step-by-step through the new disclosure forms: the Loan Estimate and the Closing Disclosure.

To view the new tools, click here.

NFM Lending is continuing to prepare its employees, industry partners and consumers for TRID. For more information on TRID, and to find out what NFM Lending is doing to prepare, click here.

Your credit score is the numerical value assigned based on the information on your credit report. Credit-reporting bureaus use complex and proprietary algorithms to calculate these, but the most widely used are FICO scores. FICO scores can range from 300 to 850, and they give potential lenders an idea of how much of a financial risk you are. To them, the higher the score, the more likely you are to repay the debt and not be late on payments or go into default.

How Are Credit Scores Calculated

Each type of credit score uses algorithms to calculate the potential risk by adding value to items such as payment history and number of credit inquiries. For FICO scores, there are 5 factors used to calculate credit scores. Each factor has different weight in how much they affect your credit score.

  1. 35% – Payment History
    The greatest impact on your credit score is paying off debts on time. If you have late payments, delinquencies, or charges, your score will be impacted negatively. However, having a few late payments doesn’t mean that you will automatically have a low score since this is just one piece of the information used to calculate the credit scores.
  2. 30% – Amount Owed
    The ratio between the amount owed and the remaining available credit has a high impact as well. Owing money on credit accounts doesn’t necessarily have a negative impact on the score, but having high balances can indicate that the person is overexerted and more likely to miss payments.
  3. 15% – Credit History
    The length of time credit lines have been opened increases your score. Note that it is also taken into consideration how long it has been since you used certain accounts.
  1. 10% – Type of Credit
    Types of credit, such as credit cards, retail accounts, installment loans, and mortgage loans will be taken into consideration. Having good debt, such as credit cards and installment loans, will bring up your scores.
  1. 10% – Inquiries and New Credit
    The number of inquiries and new credit accounts are taken into consideration since people that opened several credit accounts in a short period of time are a greater risk of not paying back their loans.

Knowing your FICO score and credit worthiness is important, especially if you are looking to get a new loan. You can use websites that provide free credit scores, but often these websites provide you with an estimate rather than your actual score. The Consumer Financial Protection Bureau (CFPB) published a report on the differences between credit scores available to consumers and those to lenders, so make sure you do your research before you submit an application for a loan. Should you have any questions about credit scores, whether you qualify for a mortgage loan with your current credit score, or how to apply for a loan, click here to contact one of our licensed mortgage loan originators today!

If you suddenly lost your job, would you be able to live comfortably until you found a new one? Emergency funds are your financial cushion in case the unexpected happens.

Why you Need One

Having an emergency fund allows you to have a financial safety net in case there is a major change in your life that affects your finances—job loss, or an medical emergency for example. Having one can help give you time to make adjustments when there is a gap between your income and expenses.

How Big it Should Be

The general guideline is to have about 3-6 months worth of income (or living expenses) in your emergency fund. This is meant to help you if lose your job or are out of work for an extended period of time due to a medical or family emergency. Having additional funds above these guidelines (if you can afford it) will allow you to have more stability.

If you were to lose your job, it may take a few months or more to find another job. The Wall Street Journal, did a study where candidates spent about one month looking for every $20,000 they earned in annual salary in their former positions. Consider how much you can afford to save, and how much money you need saved to feel comfortable.

To determine what your goal is, you need to calculate how much your basic monthly living expenses are. Add up how much you spend on food, mortgage or rent, utilities, automobile payments, and any other necessities. Leave out luxuries such as going out to eat and gym memberships. Multiply this number by three to six to find your ideal emergency fund goal. If your monthly expenses are $3,000 per month and you want to have enough money for three months, your goal will be $9,000.

How to Start Saving

It can take a long time for you to save of one month’s worth of expenses, let alone three to six months or more. Open up a separate savings account, and if possible use an account that can help you earn a reasonable amount of interest. Since you’ve already looked at some of your luxury expenses, cut one or more of these expenses and put that money in this account every month.

You might want to start with something small like $10 a week, and once you get comfortable you can increase this number to $15 then $20, and so forth. If you are able to save $20 each week for a year, you will accumulate $1,040 plus interest. It may take a few years to build your emergency fund, and that is okay—it will be well worth it once you’ve reached your goal.

When to Use it

Make sure that it is clear to yourself and your spouse or partner that this is for emergencies only. If it’s helpful, write down what constitutes an emergency so there are no premature withdrawals from this savings account. You should use your fund if you or your spouse/partner loses their job, someone in your household has an unexpected medical procedure, or if you need emergency repairs on your house or car. If you decide that you want new furniture or a new car, you can create a separate savings account for it instead of using your emergency fund.


If you do not have an emergency fund, consider starting to build one today. Saving a few dollars a week can have a positive impact on your future.