May 2009 Vol. 4 No.5
• 6 Tips for Successful Refinancing • May's Home Value Improver • About Us

6 Tips for Successful Refinancing

6 Tips for Successful Refinancing

So as the economy falls apart around us, we resilient Americans are looking for a silver living. Aha, you say, since interest rates are dropping I can refinance and save some money! As I have told you before in this newsletter, the story is never quite that simple. Who should refinance and when depends on many individual factors. If you are considering taking the plunge, consider the following six tips before you make any moves.

  1. Know your numbers and paperwork.
    Before you can make an informed decision about whether or not to refinance, do some homework. First, like you did when you got your mortgage (hopefully), figure out what you can afford. Go over your income and expense numbers again, and figure out your minimum and maximum payments. Only you know this number. No mortgage broker or bank can tell you. They may tell you what you qualify for, but that is altogether different than what you can afford.

  2. Gather up your important papers.
    Your mortgage broker and the bank will want to see and know:

    • All the information about your current mortgage - lender's name and address, loan number, balance, and the estimated market value of the home
    • Your (and any co-borrower's) social security number
    • Copies of recent paychecks and your last two W-2 forms
    • Contact information for you (and any co- borrower's) employer
    • List of your current asses and account numbers (including life insurance and retirement accounts)
    • List of your other liabilities

  3. Weigh the pros and cons.
    Many people think that simply lowering one's payments is reason enough to refinance. While it can be quite helpful, that is only one of the factors. You also have to think about what you pay in interest for the life of the loan. For instance, if you have already been paying into your loan for 10 years, you have been paying a lot of interest (mortgages are frontloaded so that payments are almost all interest in the early years.) If you refinance, you will be back at square one, paying much more into interest than principle.

  4. Shop around.
    Start with your current lender. Since it won't want to lose your business, you may be able to make some changes to your current loan. Also consider banks, credit unions and other lenders. Stay away from people who you have never heard of who call offering to refinance. With housing values dropping, what you qualified for when you bought your home has probably changed. For instance, if you bought a $500,000 house with a $400,000 mortgage, you probably qualified without a problem. If your house is worth $420,000 now, you will probably not qualify for a $400,000 mortgage.

  5. Think about closing costs, points, and don't get sucked in by "no points."
    Talk to your mortgage broker and ask her or him to look around and see what the best rate and terms are for you. You will want to know up front the fees you will pay. Wrapped up in that vague term "closing costs" are a credit check fee, underwriting fee, and processing fee, among many others. Legally, lenders are obligated to provide a "good-faith estimate" of all the closing costs. Don't get too enticed by "no points." Most likely, the fee is hidden somewhere else.

  6. Beware: The devil is in the details.
    It is vitally important that you keep track of all the seemingly small details. You'll want to know if you have to bring taxes to the table, if you are paying for a "rate lock" and other details. These can make a big difference in the end.

May's Home Value Improver

Improve Your Yard Without Breaking the Bank

If you've been to a garden supply store lately, you know that trees, bushes and flowers can add a lot to your lawn, but can take away a lot from your bank account. Like any home improvement project, careful planning and shopping can go a long way.

Think layers.
When adding bushes and plants around the house, place them well. Think of trees or tall bushes as a picture frame for your house. Place them at the edge of the house to frame the view, or in front of blank space. Meanwhile, put smaller bushes in front of them. Ground cover makes a yard look interesting and pretty, and has the added benefit of controlling weeds. Some flowering ground cover looks especially nice above stonewalls for that English garden look. Younger bushes and trees will be significantly less expensive than older, large ones.

Create an edge.
Don't allow the lawn to blend right in with your bushes. Dig up some space between the lawn and the bushes and fill it with mulch. This will create a neat look and like the ground cover, help control weeds. You can do this yourself and give your lawn that expensive, landscaped look.

Bring the inside out.
If the prices at the outdoor furniture stores have you running indoors, try some different options. Some old indoor furniture, if it is sturdy enough, can survive outdoors with the addition of some outdoor cushions and tablecloths.

Flowers, flowers, and flowers.
Adding color to your front yard is probably one of the most dramatic things you can do to improve your curb appeal. Not only will well-placed flowers hide the ugly foundation lines of your house, but they add color and show people that you have put some care into your house. Invest in perennials and you can sit back and watch the flowers come up year after year.

Of course, if the idea of gardening is not appealing to you, you can add some flowers in pots and place them strategically around the entry way and along walkways. Or, nail up some cheap wooden planters under a window and toss in some flowers and voila, you've got yourself a charming window box.

Give the front door an inviting look.
Your front door says a lot about you and your house. You want it to look inviting and pleasant. Do you prefer styles that are elegant and staid, or creative and whimsical? Doorknockers are not that expensive, and can be quite distinctive. I have one client with a funky green frog climbing up her front door as a doorknocker. A welcome mat or a small bench can add a lot, too.

Add some privacy.
You know the old adage, "good fences make good neighbors?" The same holds true for lattice, bushes, and tall plants or bushes. You could even string up some wire and grow vines if you are willing to wait a while for your privacy. If you're looking to drown out noise from neighbors or cars, water pumps can cost as little as $50 and add a relaxing running water sound to the area.

There is a lot you can do outside your home to make it look inviting and comfortable. If you follow some of these simple steps, I promise that your yard will have better curb appeal and be more enjoyable.

Did you know that Mercury is Retrograde? And that it may affect your ability make big decisions?

While I would never advise changing your life based on astrology, I do find it fascinating. Maybe you'll notice a connection between events in your life and the phase of Mercury, the planet that is thought to rule thinking and perception, processing and disseminating information, and all means of communication, commerce, education and transportation.

Mercury Retrograde normally occurs three times a year for about 6 weeks at a time. It tends to give rise to personal misunderstandings; flawed, disrupted, or delayed communications, negotiations and trade; and glitches or breakdowns with phones, computers, cars, buses, and trains.

These problems usually arise because some crucial piece of information, or component, has gone astray or awry.

It is not considered wise to make important decisions while Mercury is retrograde, since it is thought that such decisions will be clouded by misinformation, poor communication and careless thinking.

Mercury is all about mental clarity and the power of the mind, so during Mercury Retrograde these intellectual characteristics may be less acute. A word of advice: if you are refinancing right now, pay attention to the small print!

The current Mercury Retrograde phase started on May 7 and ends on June 14.

If you have a specific question about a big financial decision you need to make, please call or email anytime! And let me know if you have any interesting Mercury Retrograde stories!

Best regards,
Debbie Siegel
Westchester Mortgage

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