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

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

25 Biggest Real Estate No-Nos

A recent HGTV show hosted a panel of experts that counted down the 25 Biggest Real Estate Mistakes people make.  Here’s the list:

1. Failing to showcase your property and make small cosmetic changes
2. Setting too high of a sales price
3. Buying what you want, not what you need
4. Overlooking the extra and hidden costs
5. Buying a property without a professional inspection
6. Falling in love with the first property you see
7. Skipping the loan preapproval
8. Doing major renovations/remodeling before selling
9. Not being proactive at closing
10. Visiting the property only once
11. Not setting a realistic budget
12. Buying the most expensive property on the block
13. Not hiring a REALTOR
14. Not knowing your REALTOR
15. Trusting everything a real estate advertisement says
16. Buying without seeing the property
17. Not thinking about resale
18. Failing to market your property in different ways
19. Looking at the real estate market as the stock market
20. Waiting until spring to sell your property
21. Tyring to make the “hard sell” while showing
22. Losing money with auctions
23. Not researching the neighborhood
24. Not providing easy access for showings
25. Buying the property for its decor