4 Criteria for Cash Out Refinancing

Until a few years ago, it was a common practice among homeowners to pull money out of their property through a cash out mortgage refinance.  But the practice of bankrolling one’s dreams by tapping home equity has slowed dramatically due to slips in home prices and a tough economy.  Even so, there are still many homeowners with plenty of equity.  But in this time of economic upheaval, is it prudent to look to your home as a source of cash?  The answer depends on your overall financial picture and your plans for use of the money.

Here are four pointers for those considering mortgage refinance to take cash out of their home:

1. Get a grip on the present value of your property – contact a local Realtor who can prepare an market analysis for you that will let you know roughly what your home is worth.
2. Take your future financial needs into account – a trusted financial planner or accountant can help you decide if you should preserve the equity in your home or use it for other purposes.
3. Think through your intended use of proceeds from a mortgage refinance – buying a new car (not a good idea as a car is a depreciating asset),   down payment for a second home or investment property or underwriting your children’s college education are much better uses.
4. Make judicious use of home equity as a way out of credit card debt – this may be a sensible plan as most mortgage loans carry much lower interest rates than do credit cards.  Another advantage is that mortgage interest is tax-deductible, unlike credit card interest.

Source:  Ellen James Martin, Universal Press Syndicate, AZ Republic 7-6-08

Rounding out the Red Mountain Freeway – Loop 202

The final segment of the Red Mountain Freeway Loop 202 is opening on July 15, 2008!  The completion of the segment between Power Road and University Drive in Mesa represents an important milestone in transportation improvements in the Valley.  The Arizona Department of Transportation  is celebrating the grand opening on July 15, 2008 from 5-8pm

• Opening Ceremony with Governor Napolitano
• Road Show
• Video Interview Booth
• 5K Fun Run / 5K Bike Ride
• Hula Hoop Contest

For more info on the opening celebration, visit azdot.gov/loop202opening

Win a Dream Home from Taylor Morrison

Enter to win your dream home at tmdreamhomegiveaway.com inspired by the recently unveiled Innovations Dream Home at Disneyland in Anaheim, the contest is sponsored by Taylor Morrison, a homebuilder with numerous communities in Arizona, Florida and throughout the Southwest.  The winner will choose a Taylor Morrison home in one of the builder’s communities and participate in the design and selection of high-tech amenities.  Registration in online through August 20.

Downtown Living in Phoenix! Stunning 3 Level Corner Townhouse $585,000

DOWNTOWN LIVING! Sleek & Contemporary 3 Level Corner Townhouse. 1st level spacious office & half bath. 2nd level living room, dining room, fireplace, kitchen, half bath & 2 balconies. 3rd level 2 master suites each with walk-in closets & balconies plus full size laundry. Kitchen features granite tile counters, SS appliances and high-end gas range. Designer window treatments and ceiling fans in all rooms. Hardwood floors on 2nd level and plush carpet on 3rd. 2 car garage. Community pool and gym. 1 block to light rail and walking distance to all that downtown has to offer! Minutes to airport, seconds to I-10. Pet friendly neighborhood. Don’t wait – this one won’t last!

More info and pics.

Check Commute Costs Before Buying

When you’re stuck in traffic, you have time to think.  Should I have left home earlier?  How bad will my commute be in five years?  Would life be easier and cheaper if I found a job someplace the roads aren’t as crowded and the homes aren’t so expensive.

These are all things you should consider when buying a new home.  Always do a trial commute during rush hour before you make an offer on a home.  Time the ride and estimate your gas consumption.  If you’re thinking about taking public transportation, price out the weekly expense.

As you size up neighborhoods, take the time to figure out whee you will worship, buy groceries, go to the movies, enroll the kids in dance class or pick p an extra gallon of milk.  Is bus or rail service available, even if only as a backup for days when your car is in the shop?  Will your children be able to ride bicycles to the pool, or does a six-lane highway make that too dangerous?

It’s easy to underestimate your total transportation budget when you househunt on a quiet Sunday afternoon.  And misjudging your travel needs can derail your after-purchase budget.

Source:  Elizabeth Razzi, The Arizona Republic 6-8-08

Rent a Vacation Home and Save

High fuel costs and a shaky economy aren’t causing all travelers to cancel their summer vacations, but they are prompting people to look for ways to stretch their dollars.

One way of getting more for your money: hit the Internet to find a vacation rental instead of a hotel room, gaining space and possibly saving a couple of bucks. 

Renters have a variety of sites to consider when looking for a rental: Zonder.com, VRBO.com, CyberRentals.com and craigslist.org.

Here are three ways travelers can ensure they’re getting the best rental:

• Ask for more photos. While many of these Internet listing sites offer several photos of the property, you may want to ask for more of them 
• Ask specific questions. Ask the owner for recommendations of nearby supermarkets, where to get breakfast, the proximity to area attractions or any other features you’re interested in 
• Do more investigating. Web tools such as Zillow.com can give you an idea of the property’s value, and Google Earth can help confirm the area’s surroundings. 
• Know what is included. Some rentals provide necessities such as linens, others don’t. Know exactly what is provided so you’re not caught off guard when you arrive.

Full Article

Source: Amy Hoak, The Wall Street Journal, 5/25/08

New Financing Guidelines for Anyone with 4 or More Financed Properties

Effective August 1, 2008 Freddie Mac will NO longer allow financing where a borrower owns more than 4 financed properties, the previous number of properties allowed by Freddie/Fannie was 10.  This is a significant change and will impact anyone who has 4 or more financed properties.

If you or someone you know owns more than 4 properties (including primary residence, 2nd home and investment properties) it is important to immediately consider the following:

 1. If you own more than 4 financed properties and any of your loans are on an adjustable rate you have a 30-45 day window to get those loans refinanced to a 30 or 15 year loan.  If you do not do this now you will be stuck with an adjustable rate loan indefinitely.  If the terms on your adjustable rate are not good then you need to refinance now.

2. If you are looking to purchase a property you need to do it now!  If you already own 4 or more properties and are looking to purchase a new one and wait you will find it much more difficult to obtain financing and will most likely encounter higher rates and greater down payment requirements for using a bank that does not follow Freddie Mac and Fannie Maes guidelines.  

These new guidelines will have a huge impact on many of us as we build our investment portfolios.  If you have any questions, need to refinance or buy a property before the deadline, contact me right away at Maria@SolerEnergyProperties.com or 602-366-5073.

Arriving at a Price for your Home

The Washington Post recently had some tips on how to price a home if you’re selling:

• Don’t base the price on what you paid or what your neighbor got a few years ago.
• Do examine the pries of homes for sale in your neighborhood, as well as the prices of comparable homes that have sold in the past three to six months.
• Don’t pick a real estate agent because he or she suggested the highest list price.
• Do pick a real estate agent who offers a thoughtful explanation for the price he or she is suggesting
• Don’t go overboard with remodeling.
• Do make minor improvements so your home is in as good or better shape than the competition.
• Don’t set your price based on emotional attachments.
• Do ask your real estate agent to reasses the price every few weeks to make sure your asking price is in sync with the market.
• Don’t be stubborn.  If weeks go by without any offers, the price most likely does not reflect the value of the home.  It’s time to consider cutting the price.
• Do be patient.  You might have to wait longer for buyers to pull money together know that lenders have toughened their standards.

These are great tips that will put you in the right mindset to get your house sold.  If you’d like to discuss any of these or are just wondering what your house may be worth, contact me by email at Maria@SolerEnergyProperties.com or call me at 602-366-5073.

Should you Pay Off Your Mortgage Early?

Paying off your mortgage early will save thousands of dollars, and you’ll get a reliable rate of return on your investment (you save the interest you would have paid on your mortgage).  Yes, you’ll lose the mortgage interest tax deduction when that happens.  But if you’re in the 25% tax bracket, for example, you’d only get back a quarter for each $1 in interest you pay – not such a big break.  If you’re debt free and maxing out your 401(k) and IRAs, which offer tax breaks, paying up early isn’t a bad idea.

Source: Money Smart, Sharon Epperson, 5/11/08

Appliance Cheat Sheet

Before making a big-ticket purchase, it helps to learn your options.

When you first set foot in a showroom filled with hundreds of appliances boasting various bells and whistles, it’s hard to know which features are most important. 

To make the shopping experience a bit less harried, Real Simple put together a guide to what really matters when getting a new washing machine, refrigerator, dishwasher, range or microwave.

 Source: The Arizona Republic, 5/10/08