October 2010 Vol. 5 No.10

• 5 Things to Expect When You Refinance • October's Home Value Improver • About Us

5 Things to Expect When You Refinance

Mortgage rates are plunging with the fall temperatures, so while you dig up those wool socks, you might also want to dig up some old tax returns. For what? Well, if refinancing is in your near future, you have some work to do. The benefits of refinancing at current rates are huge. You could pay less every month, shorten the life of your mortgage, or keep your payments the same while borrowing for a home improvement project.

Of course, calling your mortgage broker is your first step. But, it doesn't stop there. It takes a lot more than a phone call to get a bank to loan you hundreds of thousands of dollars. It's best to know what to expect during the refinance process. Keep your eyes on the prize and soldier through this process successfully.

Here are five things you can expect during the refinance process:

  1. Appraisal.
    You may be familiar with this process, but banks are stricter now than they've ever been, for obvious reasons. An appraiser will come to your house and look around at everything. (You might want to pick the place up, because you'll be seeing photos of every room in your appraisal report.) The appraisal is actually a really cool document all about your home, your neighborhood, your city, and comparable houses in the area. Expect a 20+-page document.

  2. Making payments.
    Of course, the appraiser and bank do not look at your home out of the goodness of their hearts. You must pay for the appraisal (approximately $400). If you are subordinating an equity loan, you may have to pay a "subordination fee," which is a couple hundred dollars, too. Depending on the time of month when you close on the loan, you may need to bring a good chunk of change to the closing, too, to take care of the last month's mortgage payment with the old lender or fund a new escrow account with the new one.

  3. Making the big decision.
    Now is your time to make any changes to your mortgage terms. And, not counting the recent few years of plunging rates, people do not refinance that often, so think long and hard. Do you want a 15-year or a 30-year mortgage? Do you want to borrow more money to pay something off, like a car or a home project? What about your home equity line? What will you do about that?

  4. Unsolicited advice from friends.
    One of my clients was always asking questions about her friend Stephanie's mortgage instead of her own. How come Stephanie didn't pay for closing costs and I have to? Stephanie claimed she didn't have to pay for her appraisal. Why is Stephanie's rate so much better than mine? Just like your 7th grade math teacher told you not to look at your neighbor's work, it's not a good idea to look at your friend's mortgage. Remember that there are no free lunches, and your friend is paying for everything in her mortgage the same way you are, she is just probably doing it in a different way (appraisal cost rolled into mortgage, rate includes closing costs, etc.)

  5. Patience.
    You want that fabulous rate yesterday, but banks and the many other parties involved don't work like that. You'll have to wait at best a month and a half before things are finalized. Be patient, but keep in touch with your broker. He or she will keep you apprised of the process.

October's Home Value Improver

Organize Your Kitchen

The kitchen is the heart of every home and because it is often the most used room in the house, it can also end up being the most cluttered. Of course, it would be optimal to have a brand new kitchen with lots of cabinets and counter space - oh, and one of those cool built-in desks. Barring that possibility, your kitchen could probably use some TLC.

If your junk drawer was so full that you made the draw below it another junk drawer, and so on, and so on, you know what I'm talking about when I say disorganization is a central factor in frustration. After all, with 8 junk drawers, you have to search in a lot of places for the power cord for the camera!

If the unsuccessful search for the power cord had you online ordering another one, it's safe to say that you have hit disorganization "rock bottom" and are ready for some changes. Think one word while you organize your kitchen and repeat it to yourself when you get distracted: categorize. While you repeat that word to yourself, let's look at four common problem areas in the kitchen.

Food Pantry.
As a mortgage broker, I've been in a lot of houses. I can tell you that the giant walk-in pantry you dream about does not guarantee organization. So, whatever space constraints you have, work within them and don't just fantasize about another shelf or two. You can categorize your food however you want, but I like to think: snacks, baking supplies, dry goods, and canned goods. If you have young children, you may want to keep those snacks on a low shelf so that your kids have no excuse to bug you for chips.

Control Center.
How you organize this depends greatly on the flow of your family's life, so think about it carefully. Although you may intend on doing your bills and other business in other parts of your house, the reality is that a lot of this happens in the kitchen. At the very minimum, have a calendar and a place to put important papers in your control center. If you have a laptop, that's a good spot to put it, too. You may want to check out recipes, pay some bills, or write a quick email while you are working in the kitchen.

Junk Drawers.
By definition, a junk drawer holds the stuff that does not have a home anywhere else - junk. However, if you look closely, there are likely some pretty definable categories of junk in there. A quick trip to one of the many organization stores out there will get you junk drawer dividers that will allow you to categorize items so that they are easier to see. Even if your junk drawer is a real mish mash of odds and ends, these items are easier to see when stored in little containers within the junk drawer.

Storage and Cookware Cabinets.
We all know the feeling of looking at that leftover soup, wanting to store it, and having two bottoms with two tops - neither of which match. Two words for you: TOSS IT! Most plastic containers are recyclable, so toss them in the bin and go. You are much better off buying a box of new containers. Many companies have finally tuned in to customer frustration and make different size containers with matching tops. So, you can get 20 pieces of containers of different sizes and 20 tops in only two sizes. Not only will this save you time searching, it will save you space in your cabinet!

Addressing these four areas will not make your kitchen perfect, but it is an excellent start and will make you feel virtuous and organized!

Westchester Mortgage

My 3-year-old daughter is so excited about dressing up as a candy corn this weekend and going door to door to trick or treat.

While trick or treating is a fabulous activity for children, it's not something you want to deal with when financing your home. It's natural to feel gunshy about making any changes to your financial situation, as there have been far too many tricks uncovered in recent years - from questionable mortgage programs to government bailouts of Wall Street firms.

But the good news is that there are treats to be had if you know where to look and how to take advantage of them. I am happy to answer any question you have about financing your home - all year long, not just at Halloween!

Have a Milky Way for me!

Best regards,
Debbie Siegel
Westchester Mortgage

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