An Easy Way to Shave Months - or YEARS off your Mortgage

Owning your own home is a wonderful feeling! Committing yourself to a mortgage of 30 years, however, is a 'not so good feeling'. This is especially true when you consider how much interest is paid over the life of the loan. For a $100,000 mortgage over 30 years, interest payments alone will be $115,838 --- WOW. There are several alternatives to paying this amount of interest, and have the loan paid off sooner.

One alternative is to finance with a 15 year loan...the advantage is obvious, interest over 15 years for the same mortgage would be $51894.....a savings of $63,944. The downside to this is that the monthly payments are increased by about $250....from $600 to $843. I know, if I could aford that, I would have bought a different house!!

Another option to shorten the mortgage is to pay the first month's payment on the first day following close on the property. As mortgage interest is calculated in arrears, you generally skip the first month's payment following closing on the property. This one action will reduce the term of the mortgage by about 7 months! The $600 paid early will result in a savings of about $4200 in interest over the life of the loan.

The final option is to pay additional principle on the mortgage each month. A lot is heard about bi-monthly mortgage payments, where lenders will allow you to pay every other week instead of once a month. By doing this, you make 13 monthly payments annually rather than 12. Most lenders charge a fee for this service. You can accomplish the same thing (and avoid the fees!) by taking your monthly payment and dividing by 12 (in this example $50), then adding that to the monthly payment and indicating that it is 'additional principle'. This option if done regularly will reduce your mortgage by nearly 6 years, and save a significant amount of interest over the term of the mortgage!!

You may be able to refinance your existing Mortgage if you are 'under water'

Borrowers hoping to refinance who do not have at least 20 percent equity in their homes may qualify for the Obama administration’s “Making Home Affordable” program. Through June 2010, borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac may be able to refinance for up to 105 percent of a home’s value.

Homeowners must be current on their mortgage payments and may qualify with credit scores as low as 620. Borrowers who do not meet the criteria for the refinance program may be eligible for another Obama administration plan that focuses on loan modifications. See www.makinghomeaffordable.gov.

White House may extend first time homebuyer tax credit

As you are probably aware, the $8000 tax credit for first time home buyers will be expiring on November 30,2009. Economists are currently evaluating the impact the credit has had on the economy, and will be making a recommendation to the President shortly.

Realtors, builders, not to mention first time home buyers feel this credit has had a positive impact on the economy. If you agree, please contact your congressman to weigh in on this important issue.....and perhaps be the benefactor of the $8000 credit!!!

To be sure, if you are considering purchasing a new home, the time to act is fast running out....with lenders now taking about 45 days for loan approval and closing, the 'sand is fast running out of the hour glass'!!

Home Inspector Kills the Deal

Oftentimes overlooked, a home inspection is a big benefit to the buyer when purchasing a home. A Home Inspection should be performed by a reputable, qualified individual...one who is honest, and has an affiliation with an association of professionals. ASHI is perhaps the leading affiliation of home inspectors.

Until recently, Florida required no licensing of home inspectors....basically anyone could become one. Realtors, through their own lack of knowledge turned to licensed contractors oftentimes to perform home inspections.

So what is the job of the inspector? In simple terms, it is to determine the condition of the property at the time of the inspection. A house does not 'pass' or 'fail' an inspection.....the condition of the home is determined as of the date of the inspection.

So many times the inspector can 'kill' a deal merely by his presentation of the facts to the buyer. As an example, using the technical term of 'reverse polarity' in a report could create unnecessary concern on the part of the buyer relating to the electrical system. Realizing that to correct such a condition requires only reversal of two wires at a minimal cost puts such a condition more into the correct perspective.

You can see where communication of the facts in a fair balanced manner is important.....having a trained, competent inspector is a critical factor in communicating to buyers the proper significance of issues detected in the purchase of real estate.

Buying a home is perhaps the single largest purchase most people make. The processionalism of an inspector and their communicative skills is critical in discussing with the buyer exactly the condition of the home.

Look for an inspector who is qualified, and not 'a rookie'. Again, being affiliated with ASHI - the American Society of Home Inspectors, is a good place to start in finding a good home inspector.

Photos Make a Difference

So what's the big deal with photos and listing of your home for sale. When trying to sell real estate, it's important to have a lot of pictures, and ones with quality. Small bathrooms are particularly difficult to visualize. To capture all of the room, you really need a camera with a wide angle lens, as in the photo at the left.

Without a wide angle lens, you get photos such as the one on the left. Quite a difference! With a 'point and shoot' camera, generally it's just not possible to capture the entire room. In essence you're standing in the doorway and taking a picture of about a 5' wide area.

A lot of pictures, with as much detail of a room possible is important in getting potential buyers to visualize a home, regardless of how and where it is listed!