About Refinancing

We've been hearing a lot about refinancing.  What is refinancing all about?  Will it really help your current financial situation? When is the right time to refinance your home?

It may be the right time for refinancing your home if:
- You want to lower your monthly payment and you don't mind if you end up paying more interest over the life of the loan

- You want to shorten the term of your loan and you can afford to pay more per month

- You want to get cash out for a home improvement project or to pay off consumer debt 

- You have an adjustable-rate mortgage (ARM) and you want to convert to a fixed-rate mortgage to lock in current rate

Mortgage rates are at rock-bottom lows.  Freddie Mac recently released the results of its Primary Mortgage Market Survey showing 30-year fixed rate mortgage averaged 3.99%, the 15-year FRM averaged at 3.30%. 

According to bankrate.com, with the current mortgage rate in the market, this is a good time to at least consider refinancing your home.  Here are the things you need to know when you're thinking about refinancing:

1. Know how much your house is worth compared to how much you owe

If you do not know your current loan balance, you may check your last annual statement from the mortgage company, read a recent invoice or call the servicer and ask.  Just an approximate will be enough.  You can check Zillow Zestimate or Trulia for the current value of your home.  Divide the home's estimated value by the amount you owe. If you owe $80,000 and the house is worth $100,000, then you owe 80% of the home's value.  If you owe $120,000 and the house is worth $100,000, then you owe 120% of the value.

2. Find out the value of your home equity loan or equity line of credit. 

Add that amount to the amount you owe on the main mortgage. Take the combined amount, and divide it by the home's estimated value.  For example, if you owe $80,000 on the first mortgage and $10,000 on the same equity line of credit, you owe a total off $90,000.  If the house is worth $100,000, then your total debt on the house is 90% of the home's value.

3. Document all your assets. 

This includes all your savings and checking accounts, retirement accounts, mutual funds, stocks, bonds and trust funds.

4. Refinance for the same term as your outstanding loan.

With a refinance, don't start again at the bottom.  If you have already paid 5 years of your 30-year loan, arrange your financing for a 25-year mortgage.  You planned to pay off the remaining old mortgage in 25 years, so you should also plan to pay off the new mortgage in 25 years.  Just ask the lender to amortize your payments over the shorter term.  Or, if you can afford it, refinance into a 15-year mortgage.

5. Don't make any big purchases before closing the refinancing 

"A major financial investment could lower your credit score, this can result to paying more in fees or getting a higher interest rate.  Wait until the refinance is closed and funded before you do anything that might change your credit profile." says Michael Becker, Mortgage Consultant for Green Pastures Mortgage & Finance in Lutherville, Md.

6. Shop for several lenders

When shopping for lenders, check with different types of lenders: including banks, credit unions and mortgage brokers.  The more you compare rates and closing costs, the more you'll know which is the right lender for you.  Don't be afraid to ask too many questions. Ask about charges associated with a new mortgage, this may include the application fee, credit check fee, appraisal fee, origination fee, document processing fee and underwriting fee. 

Other charges may go by various names, including copying fees, broker fees and yield spread premiums.

7. Watch the little details

Read the contract carefully, watch out for small prints. This can save you lots of money if you fully understand the terms of your new loan. 

Refinancing allows you to take out a new loan that pays off your current mortgage.  Although you are then obligated to make payments on the new loan, your costs typically are lower after refinancing.  A new half-percent rate lower than the original interest rate may save hundreds of dollars each month.  However,
it is always advisable to make a comparison between an old loan and refinancing loan computation -- just to see if refinancing is a better option for you.

Beware of scams you might encounter during a search for a lender.

If you have any questions about refinancing, please don't hesitate to contact me.

Turkey Day Special (Part 3/3)

Although at first, many people might say that the best thing about Thanksgiving is the food, or maybe even NFL football, but I think most would agree that when you stop to think about it, the best thing about Thanksgiving is spending time with your family. As you get ready for Thanksgiving this year, here are few fun things to do with your family on Thanksgiving.

1. Board Games on Thanksgiving

One popular board game among families is Apples to Apples. It’s a great group game and a ton of fun! You can also play games like Taboo and Monopoly.


2. Look at Family Pictures on Thanksgiving

Thanksgiving is all about giving thanks for all that you have in your life. One fun thing to do on Thanksgiving is look through family pictures. It’s especially fun to go through all of the old pictures of you and your family from growing up. It’s even better if one of your siblings has a new girlfriend or boyfriend as going through all pictures of your brother or sister is very embarrassing. It can lead to a lot of laughs on Thanksgiving!


3. Volunteer on Thanksgiving

Volunteering on Thanksgiving is a great way to give back to your local community.  Working at a local soup kitchen and working on community outreach programs on Thanksgiving can provide you with a real sense of pride.


4. Family Home Improvement Project on Thanksgiving

Do you have a home improvement project that you’ve been putting off? Well, have the family over to your house for Thanksgiving this year! No seriously, working on a home improvement project with your family can be really fun. It’s also a great way to get a few things done around the house on the cheap.

Thanksgiving is one holiday in the year that we look forward to.  I hope you all have an enjoyable day with your loved ones.  Happy Thanksgiving to all and to your loved ones.

Turkey Day Special (Part 2/3)

For Thanksgiving Day, friends and family will be looking forward to some traditional roast turkey with stuffing, mashed potatoes with gravy, pecan and pumpkin pie and sweet potato and green bean casseroles (No wonder, it takes 18 hours to prepare!)

Of course, it's not a Thanksgiving Dinner without the star of the table.  Here's an easy turkey recipe from Martha Stewart that you can follow:

Ingredients

    1 whole turkey (about 12 pounds), thawed if frozen, rinsed and patted dry (neck and giblets reserved, liver discarded)
    Coarse salt and ground pepper
    4 cups Pecan Cornbread Dressing
    2 tablespoons butter, room temperature
    1/2 cup packed light-brown sugar
    1/4 cup spicy brown mustard

Directions

1.    Preheat oven to 350 degrees with rack in lowest position.  Place turkey on roasting rack set in a large roasting pan. Season inside of turkey with salt and pepper. Loosely fill neck and large cavity with dressing; fold skin over, and secure with skewers or trussing needles, if necessary. Bend wing tips forward, and tuck under neck cavity. Using kitchen twine, tie legs together securely. Rub turkey all over with butter; season with salt and pepper.

2.    Add neck, giblets, and 3 cups water to roasting pan. Cover turkey loosely with aluminum foil. Roast 1 hour, and then baste with pan juices every 30 minutes, until an instant-read thermometer inserted in thickest part of a thigh (avoiding bone) registers 125 degrees, 1 to 2 hours more.

3.    Remove foil; increase heat to 400 degrees. In a small bowl, stir together sugar and mustard; brush turkey with glaze. Rotate pan, and continue to roast turkey, brushing with glaze 2 to 3 more times, until thermometer registers 165 degrees, 45  minutes to 1 hour more (tent with buttered foil if browning too quickly; add more water if pan becomes dry).

4.    Transfer turkey to a platter; reserve pan with drippings for gravy (opposite). Cover turkey loosely with foil, and let rest at least 30 minutes (or up to 1 hour). Before serving, remove dressing, and carve.

Turkey Day Special (Part 1/3)

Thanksgiving is the holiday for giving thanks to all our friends, families and relatives. It is the day to thank God for the blessings we have received. It is also the day to meet friends and family.  Don't you find it funny that Thanksgiving dinners take eighteen hours to prepare? They are consumed in twelve minutes. Half-times take 12 minutes. And it's not a coincidence! 

I know you've learned about the history of Thanksgiving in school, but here's a refresher anyway -- in case you've forgotten about them.  In September 1620, 102 brave men and women from Plymouth, England boarded the ship of their dreams called the Mayflower to set sail for the "New World" (which is now called the United States of America).  These men and women were Pilgrims seeking a new home where they can freely practice their faith. Other individuals were lured by the promise of prosperity and land ownership in the New World.  After 66 days of hard travel, they dropped anchor on December 1620, near the tip of Cape Cod - which is far north of their intended destination.  One month later, the Mayflower crossed Massachusetts Bay, where the Pilgrims began the work of establishing a village at Plymouth.

The brutal winter that year killed almost half of their people.  Most of the colonists remained on board the ship, where they suffered from exposure, scurvy and outbreaks of contagious disease.  In March, they received a visit from an English speaking Abenaki Indian welcoming them to the land. Several days after, they met another Native American, named Squanto who taught them about fishing, planting and hunting. 

By autumn of 1621, the colonist had collected enough food to feed the whole community for the following winter. To celebrate the first successful harvest, Governor William Bradford organized a 3 day feast, which is now known as America's first "Thanksgiving".

In 1777, the Continental Congress decreed that all America's 13 colonies celebrate a national day of "Thanksgiving" that year to celebrate their victory from the British at Seratoga. However, by the mid 19th century, many celebrated the holiday, but there was no official day declared to celebrate Thanksgiving.  The author of nursery rhyme, "Mary Had a Little Lamb" - Sarah Josepha Hale persuaded Abraham Lincoln in 1863 to proclaim November 26 as the nation's official day of "Thanksgiving", to be observed the final Thursday in November each year.

In the 1920's, a national football league was born. In order to boost attendance, they devised a concept of Thanksgiving Day Game.

Parades became a turkey day tradition. The Department Stores also saw value in Thanksgiving day, they organize sales as kickoff to Christmas shopping season.

Most of all, Thanksgiving is about family. With modern life moving at a faster pace, Thanksgiving is a day that gives us time to collect our breath, reconnect with our loved ones and to just remember of what we are thankful for.

Tips on How to Sell Your Home Quickly

Even on this tough housing market, these tips can help you sell your home faster to potential buyers:

1. Price your home Right!  The current housing market is sluggish, so instead of pricing your home aggressively high, consider pricing your property no higher than the middle of the range of homes comparable to your home.

If you need to sell your home quickly, price your home among the bottom 25% of comparable homes. Why? With few buyers chasing many homes, you need to quickly get the attention of those who are serious about buying. If your home is priced too high, buyers won't even consider looking at your home. 

2. Home Staging.   Home Staging can either be done by yourself or by a professional.  A home staging professional will come in and take away some furnishings and rearrange others to make your home show better.  The goal of home staging is to create a home interior that looks brighter, bigger and more inviting to potential buyers that will ensure quick sale of the home and for the highest possible price.

The top two priorities when staging a home for a quick sale are fresh-paint and like-new cleanliness.

3. Fresh Paint. Fix any hole and cracks on the walls of your home.  Apply a fresh coat of paint to the room that needs it. Neutral colors lead to a new, clean, classic and spacious look.

4. Curb Appeal. The first thing home buyers will see when they arrive at your home is your front yard, the color of your home, the landscaping and walkways.  If your home's curb appeal makes a great first impression, everyone -- including potential home buyers -- will want to see what's inside.  Have a fresh paint on the exterior of your home; Clear the weeds, debris and pressure wash concrete, brick and pavers to give a clean appeal to your stepping areas.

5. Fix Stuff.  Fix the broken window; fix the hinge on the broken kitchen cabinet; fix the leaky faucet. If you don't have the time or skill, find a handyman to go through your home and make repairs. Also consider replacing the old roof that looks like it might leak, the antique furnace and the stained rug.  

6. Declutter and depersonalize. Pack up all your trinkets, anything that sits on the top of the counter top, table or other flat surfaces.  Take away all the things that make your home your personal sanctuary -- your family photos, religious items or kitchen memorabilia from a trip. Pack them up and put them into a storage.  Buyers want to visualize your house BEING their home. It's difficult to visualize their own style when your stuff is scattered all around the place.

7. Organize your Closet. Pack up all seasonal clothes from your closets. This will free up some closet space and your closet will appear large and spacious. Aim to remove 2/3 of your closet space. Disorganized closets tell buyers that your home doesn't have enough storage space. Aim to remove 2/3 of your clothes from your closet.

8. Hire an experienced Realtor.  He will be able to share some tips on how to price your property for quick sale and he knows what the buyers are looking for in a home.  His advice will get your property off the market in no time.  

If you need tips on how to sell your home quickly, please don't hesitate to contact me.

Changes in the Home Affordable Refinance Program

Federal Housing Finance Agency, Freddie Mac and Fannie Mae has announced a series of HARP Changes to Reach More Borrowers. The goal of this new program is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.

The new program enhancement addresses several other key aspects of HARP including:

- Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;

- Removing the current 125% Loan-to-Value ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;

- Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;

- Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and

- Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

Borrowers who owe more as compared to the value of the home will be able to reduce balance owed much faster if they take advantage of today's low interest rates by shortening the term of their mortgage.

Criteria for HARP eligibility:

- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae; 

- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009;

- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May 2009;

- The current loan-to-value (LTV) ratio must be greater than 80%

- The borrower must be current on the mortgage at the time of the refinance, with no late payments in the past 6 months and no more than one late payment in the past 12 months.

FHFA, Freddie Mac and Fannie Mae will be issuing a detailed guideline of the new changes in the program to the mortgage lenders and servicers by November 15.  For more information, please visit https://www.efanniemae.com/sf/mha/mharefi/pdf/refinancefaqs.pdf