Events Calendar
In This Section
After 30 years at the helm of Akron Children's, Considine still looks to future
New version of Mozilla Thunderbird landing soon
SCORE offers wide variety of workshops
About Matsos Greek Dressing & Marinade
All-in-one units jolt desktop computer sales
Does it work? Test team returns to try out new products advertised on television
Most Read Stories
Police accuse bank robbery suspect of gobbling up note (with dashcam video)
Victim of beating in Kent last week is declared dead at Akron hospital
Can DNA tests free ex-Akron captain?
Dad accused of forcing son into field, killing him
Does it work? Test team returns to try out new products advertised on television
Man found dead in North Akron home is identified
Blogs:
Pets:
Cat-loving chihuahua suckles seven abandoned kittens
The Heldenfiles:
Sunday Notebook
Patrick McManamon:
Browns sick after sick loss in Detroit
Akron Zips:
Zips advance to Sweet Sixteen
Tribe Matters:
Seven players added to Tribe’s 40-man roster
Cleveland Browns:
Post-game defensive quotes
Kent State Sports:
Kent State defeats Rochester College, 63-44
Cleveland Cavaliers:
Gameblog: Cavs vs. Philadelphia 76ers
Buckeye Blogging:
OSU – Michigan college football rivals meet in Baghdad
Varsity Letters:
Four area football teams play tonight
All Da King's Men:
The Sunday Sanity Challenge
Blog of Mass Destruction:
Will Health Care Reform Pass?
Akron Law Café:
Health Care Financing Reform: (69) The Brookings Institute Study on "Bending the Curve" – Four General Strategies
See Jane Style:
Vintage Chic
Car Chase:
TIME TO GET YOUR COLLECTOR CARS WINTERIZED
Let's Talk Real Estate:
Silverdome Potentially SOLD!
Ohio Travels with Betty:
George is looking for a Thanksgiving buffet in Akron.
Sound Check:
Steely Dan Plays "The Royal Scam" at E.J. Thomas Hall
HRLite House:
A Random Rant on Testing
Akron Gamer:
Nintendo's Mario endures even as games come and go
Widowed mother should stick with her fixed rate; to pay off credit-card debt, use home-equity loan
Published on Saturday, Sep 01, 2007
Q: I am a 51-year-old widow of eight years with three children, ages 9, 11 and 15. I earn only about $3,000 per month, and my children receive a total of $2,100 per month in Social Security benefits. I have owned my home for six years and have a 30-year fixed-rate mortgage at 5.375 percent interest. My monthly payment is $1,279, including $67 PMI (private mortgage insurance) plus $217 for escrowed property taxes and insurance. I have $16,000 in credit-card debt at 8 to 10 percent interest, mostly for home improvements and medical expenses, and $125,000 in an IRA. My FICO score is 779. I recently met with a financial adviser/college planner who recommends I refinance with a 20-year, fixed-rate, interest-only mortgage at 6.75 percent interest. My new payment would be $1,317, including the tax and insurance, escrow but no PMI. But I would go from having $70,000 equity to almost no equity. He anticipates I will refinance again in three to five years. I would walk out with about $25,000 to pay off my credit cards and buy annuities. I would use the $600 saved each month on credit-card debt for emergency cash reserves. Is this interest-only mortgage a good idea? Phyllis K.
A: You appear to be doing a great job of managing your household on a limited budget. But I don't like the idea of your being ''sold'' on a bad interest-only mortgage that will wipe out your equity and not build any future home equity from monthly mortgage payments.
Unless you currently have an FHA mortgage, you can easily get rid of that $67 monthly PMI premium if your loan-to-value ratio is below 80 percent. Just contact your lender and explain you have at least 20 percent home equity. You'll have to pay for a new appraisal, but that will be money well spent to save $804 annually.
There's no advantage for you to refinance from 5.375 percent to 6.75 percent interest. If you want to pay off your credit card debt, get a home equity credit line. With your superb FICO score, your bank should eagerly approve such a credit line at the prime rate or lower.
Q: Several months ago your article gave a top rating to a new book by a mortgage insider who revealed the mortgage-lending dirty tricks. But I lost that article. What is the name of that book? Peggy P.
A: In the last few months I reviewed several excellent new books by mortgage insiders. The most recent is Mortgage Rip-Offs and Money Savers by Carolyn Warren. Another superb recent book is Mortgage Confidential by mortgage broker David Reed. Both are available at public libraries, Amazon.com or local bookstores in stock or by special order.
Q: I am a real estate investor with an interest in getting certified to appraise residential and/or commercial properties. Someone told me that appraisers will not be in demand because of the availability of information on the Internet. I don't want to waste my time or money if property appraisers will not be in demand in the near future. What is your opinion? Sandy W.
A: I suggest you take the basic real estate appraisal course at your local community college next semester. After completing the course and talking with the instructor, you will know if you like appraisal work and what the future is for appraisers.
Q: About two years ago, my boyfriend and I bought a two-bedroom condo. Before we closed our purchase, we were told by our professional inspector there was a problem with moisture and rain around a bedroom window. The condo management company sent out a contractor, who agreed the problem was structural and the homeowners association should pay for repairs. So we went ahead with our purchase. Despite our repeated pleas and letters, the window still leaks. We finally contacted the president of the large homeowners association, who had no knowledge of the problem, and the leak is now so serious that we can't use that bedroom. Our son is now 2 years old, and we were hoping that would become his bedroom. What should we do? Erica W.
A: If I were in your situation, I would be much more aggressive. The homeowners association clearly has a duty to repair that leaky window.
I suggest writing a very polite letter to the homeowners association president, with a copy to the professional management company, stating you want this long-standing problem fixed within 30 days.
If you don't get satisfactory action by then, it's time to hire a local lawyer who is familiar with condominium law. This problem is affecting the enjoyment of your condo, its market value and the marketability of your unit. You've been very patient far too long.
Q: I sold my house six years ago and carried back a $7,000 second mortgage at 5 percent interest for the buyer. She has made only random payments of different amounts, for about $5,000 total, including interest. There was supposed to be a balloon payment due at the end of two years. She still owes me about $5,000. My problem is that the Realtor who handled this said he would handle any problems. He has all the paperwork. I realize I am not at the top of his priority list. The loan is way overdue. I've avoided consulting a lawyer because I heard the fee would be more than the loan balance. What should I do? Marianne T.
A: Get rid of that Realtor. His job is to sell properties, not to advise you on servicing a mortgage that is in default. Get all the paperwork from the Realtor and figure out exactly what the defaulting borrower owes you.
Then, depending where the property is, take your documentation to either the trustee named on the deed of trust or to a local real estate lawyer who specializes in mortgage foreclosures.
You will get your money when the borrower receives the official notice or, if the property goes to a foreclosure sale, from the high bidder, or you will get the property title back to sell for a second profit.
Send real-estate questions to http://www.bobbruss.com or Robert Bruss, 251 Park Road, Burlingame, CA 94010.
Q: I am a 51-year-old widow of eight years with three children, ages 9, 11 and 15. I earn only about $3,000 per month, and my children receive a total of $2,100 per month in Social Security benefits. I have owned my home for six years and have a 30-year fixed-rate mortgage at 5.375 percent interest. My monthly payment is $1,279, including $67 PMI (private mortgage insurance) plus $217 for escrowed property taxes and insurance. I have $16,000 in credit-card debt at 8 to 10 percent interest, mostly for home improvements and medical expenses, and $125,000 in an IRA. My FICO score is 779. I recently met with a financial adviser/college planner who recommends I refinance with a 20-year, fixed-rate, interest-only mortgage at 6.75 percent interest. My new payment would be $1,317, including the tax and insurance, escrow but no PMI. But I would go from having $70,000 equity to almost no equity. He anticipates I will refinance again in three to five years. I would walk out with about $25,000 to pay off my credit cards and buy annuities. I would use the $600 saved each month on credit-card debt for emergency cash reserves. Is this interest-only mortgage a good idea? Phyllis K.
Get the full article here.
Comments
Click here to post your comments
