How To Painlessly Pay Your Mortgage Off Faster

If you're like me, you hate to spend more than you have to for anything. And yet, you may be doing that with your mortgage. So I'm offering you a couple of easy tips on how to accelerate the reduction of the principal amount of your mortgage and save significant amount of interest payments.

You May Have Heard Of The Bi-Weekly Mortgage

Don't sign up for the lender's bi-weekly mortgage program. There's usually a big upfront fee and additional fees every two weeks when the lender would automatically withdraw 1/2 payment from your account. Instead, one of the simplest ways to pay down your mortgage quicker is to make one extra payment each year. The way to do this is divide the monthly principal and interest portion of your monthly payment by 12 and add that amount to each mortgage payment. You must list on your monthly statement that the extra amount is to be applied to additional principal. By doing this every month and having nothing change with your mortgage, it's possible to pay off your 30-year mortgage approximately 7 - 8 years early. Even if you don't intend to pay off your mortgage until you sell in the future, it sure will make a difference in the amount of equity you build up and have at the time of your home sale.

Create Your Own 15-Year Mortgage Without Being Tied To It

Another way to save mortgage expenses is to pay a 30-year mortgage on a self-imposed 15 or 20-year schedule. Prepare an amortization schedule (Upon your request, I can provide you to you free of charge.) and add the extra principal amount to each monthly payment based on the higher figure. Since the mortgage term is shorter, you will have a higher payment. But if you were to get a 15 year mortgage and be tied to it, if something happened to you financially and you couldn't afford the higher payments, this way allows you to the flexibility of going back to making the normal 30-year payment amount should an unexpected expense temporarily come along.

A Painless Way

Finally, I had a friend who in the first year just added an extra $25 to her monthly payment, applying it to 'additional principal'. The next year she raised it to $35 extra; the next year it was $45. Get the picture! She said she never missed the money, but she saved thousands of dollars over the life of her mortgage in reduced interest payments.

If you want to know what your monthly principal and interest payment would be on a shorter term loan, contact me at dan@danweis.com and I'll gladly compute it for you.

Dan
dan@DanWeis.com
http://www.HomeBuyingClass.com
http://www.CincinnatiRealEstateHelp.com

Answer To Breathing Cleaner Air & Dusting Less!

Have you changed your furnace filter lately? It's so easy to forget to change it. I know I have. Did you know you should change your filter every month to get the maximum amount of energy out of your furnace and to increase the quality of air you're breathing? A new furnace filter starts at $1 - $3 each and can run up to $25 - $35 for a reusable one. You can upgrade to a model that collects more dust and pollens.

Changing it regularly means you won't have to dust as often and it'll save you money on your utility bills. Why not buy a dozen at a time and then you're set for the entire year? I also make monthly notations on our calendar, so we don't forget to change the filter. It's also a great time to write on your calendar: "Service Furnace" for the fall and "Service A/C" in the spring.

Dan
dan@DanWeis.com
http://www.HomeBuyingClass.com
http://www.CincinnatiRealEstateHelp.com

She GOT BURNED! If Only......

Wanting to help you with all of your real estate needs, both now and in the future, doesn't mean only when you want to buy or sell a home, but anytime you need something that involves your home or mortgage.

I'm glad to provide you with an update on what's happening in your neighborhood and what has recently sold, so you'll know what your neighborhood values are doing. If you need help with contractors, insurance, re-financing or anything else, think of me as your Real Estate Consultant. If I don't know the answer, I'll find out and call you back.

The reason is simple. I want your confidence in my ability, so that when you hear of anyone wanting to buy or sell a home, you'll recommend me enthusiastically.

When something involving real estate enters your mind, I want you to call me to make sure what you're planning to do is the best thing for you. Not what some third-party thinks you should do.

Recently, I heard a story from an individual, who had re-financed her mortgage to consolidate her bills, and GOT BURNED! From an out-of-state lender, whom she had never met, she paid really high closing costs...got an adjustable rate mortgage that shot way up...owes MORE than her home is worth...and now has to pay a prepayment penalty if she tries to re-finance again to get out of it. You need to understand that banks and mortgage companies are bombarding everyone with "unbelievable offers" to get you to sign up for one of their "deals of the day". Most people only get a few mortgages in their lifetime and lenders know that. I don't want something like this to happen to you.

You call your doctor when you're sick. Please call me when you have a real estate question or problem. The best time to call me is before something goes bad or before you sign documents. As you know, I'm not an attorney, but if needed, I can point you in the right direction. Remember, you're NOT bothering me. I'm here to help you.

Dan
dan@DanWeis.com
http://www.HomeBuyingClass.com
http://www.CincinnatiRealEstateHelp.com

2006 Real Estate & Mortgage Forecast

Guest columnist - Rick Pilger, Mortgage Consultant, www.RickPilger.com

Everybody wants to know if rates will go up, down or stay the same in '06. And more than ever, they want to know about the housing market. Both numbers depend on economic factors, so we will start there. I know you are tempted, but don't skip ahead.

With a negative savings rate in the US, we are a nation of spenders. That's good for the economy, but it can come back to haunt those who don't have enough put away for retirement.

97% of Americans don't have a college savings plan for their children. If that weren't scary enough, less than a third of workers think they will have enough to retire in a way that sustains their accustomed lifestyle. So what does this tell you? Great opportunities lie ahead for those mortgage professionals who are fiscally literate and can coach their clients. It also tells us that we must be aligned with other financial professionals who can best assist our customers. Clients need and are thirsting for assistance in this area.

Cutting into the budget of the American household is the rising cost of oil. Don't expect it to let up much. Oil should be over $60 to under $80 for most of 2006. Gasoline should ride between $2.50 and $3.00 a gallon. That's quite a bit higher than what we have been used to, but still a lot less than most of the world pays.

Some well-known brokerage firms are calling for $100 per barrel oil prices…but we just don't see that. The good thing about higher prices is that it creates opportunities. People get more creative when the rewards for doing so increase. At $10 - $15 a barrel, there isn't a lot of incentive to find other energy sources or to pull oil from more difficult areas. But as prices rise, other sources become much more viable as potential alternatives.

We will enter the fifth year of the anticipated housing bubble. Yes, for the past four years, the media has beat the drum on a looming housing bubble. But all the media bubble hype has only served to hurt those buyers who were scared off from purchasing a home earlier and now see how much more those homes cost.

So is there a bubble? The simple answer is no. But some areas may cool a bit after a torrid run up, especially in the top tier of their price category.

AND RATES WILL?......Rates will rise a bit due to some inflationary pressure, but not too bad. Keeping rates at good levels will be continued foreign demand and asset reallocation. Our bonds look pretty good to foreigners, who are offered lower returns in their home country. And the Dollar has been stronger and may offer some bonus returns as the greenback makes further gains against most major foreign currencies. In fact, foreign buying accounts for almost half of bond purchases in the US.As our population ages, more assets will be reallocated from riskier stocks that provide growth to safer bonds, which provide preservation. These factors should keep fixed rates between 6% and 7%, with an average of 6.5% for the year.

WHAT ABOUT HOUSING?......NAR is forecasting total existing-home sales, including condos and cooperatives, of 6.86 million units in 2006, down 3.5 percent from the estimated all-time record of 7.11 million in 2005 and the second highest ever. New-home sales will reach 1.24 million, down 4.6 percent from a record 1.30 million in 2005, NAR forecasts.

The easing housing shortage will soften price appreciation as supply and demand move into better balance. NAR is forecasting national median price appreciation of 5.3 percent in 2006, down from 12.4 percent in 2005, so practitioners will need to start reducing sellers’ expectations of what their home can command and how long it will stay on the market.

Signs that eased appreciation might help first-time buyers have yet to emerge, though, in part because of the rise in rates, which hurts affordability. NAR’s affordability index in September stood at about 120, down from an average of about 133 in 2004. An index of 120 means a household earning the national median income earns 120 percent of what it needs to qualify for a mortgage on a house priced at the national median.

The most robust sales activity will be on the lower end of the market in 2006, economists say. Sales have started slowing on million-dollar homes, already a thin part of the market, but homes that list near the local median price will be snapped up. “Anything affordably priced will continue to sell well,” says Frank Nothaft, chief economist for Freddie Mac.

BOTTOM LINE......Our economy has weathered the most destructive storm ever, the tech bust, the terrorist attack, wars abroad, and accounting scandals. Despite all that, the stage is set for healthy market growth, and real estate is a prime beneficiary of that.

Wishing you the best,

Dan
dan@DanWeis.com
http://www.HomeBuyingClass.com
http://www.cincinnatirealestatehelp.com/

Finding Out Your Home's Worth On-Line Can Be Costly!

Don't you wonder from time to time what home values are doing in your area?

With the growth of the Internet today and all of its spamming, you would think that an e-mail offering to provide you with information on how much your property is worth would be a valuable, free service that you would want to take advantage of.

But NO, STOP!

Before you start typing your personal information, e-mail address and phone number, you need to stop and think: "What are they going to do with my information?"

These web sites, who want you to subscribe to their FREE information, are owned by large corporations, who often times sell your information to third-party entities, who in turn start marketing their products and services to you. There are even some companies, like HomeGain.com, HouseValues.com, RealEstate.com and others, who sell your information to real estate companies for, in some cases, $20 - $100 per e-mail address plus additional, hefty fees later. Then it won't be long before you begin getting e-mails and phone calls from real estate agents, because they have paid to receive your information, whether or not you're in the market to buy or sell a property.

Other web sites may have you register for a contest and all of sudden, you're receiving real estate solicitations. Often times, the real estate agents that purchase these 'leads' don't have much experience in the industry and are desperate for business. I've always stated that it doesn't cost any more to hire an experienced agent than a newbie, but a new agent's lack of knowledge can cost you dearly.

And all you wanted from the privacy of your own computer were the home values in your neighborhood.

Now, for a solution to avoid this "Bait & Switch" scenario: feel free to contact me anytime by telephone: 513-615-1890 or just e-mail me at: dan@DanWeis.com and I'll gladly provide you with a FREE list of properties that have recently sold as well as those currently for sale in your neighborhood. There's no cost or obligation for this service.

Wishing you the best,

Dan
dan@DanWeis.com
http://www.HomeBuyingClass.com
http://www.CincinnatiRealEstateHelp.com

Need To Replace A/C Or Heat Pump? Mistake To Wait!

Effective January 23, 2006, a nationwide, Federal mandate is changing the current Seasonal Energy Efficiency Rating (SEER) from 10 to 13. The change will result in a 30% increase in energy efficiency for air conditioners and heat pumps resulting in cleaner air and environment, but at the expense of your pocketbook

After 1/23/06, US manufacturers may only produce air conditioners and heat pump units with a minimum 13 SEER rating. Units that are less than 13 SEER can still be installed until inventories have been depleted.

What does this mean to you and me?

• 13 SEER units will be larger and more expensive. Consumer costs will be higher and more expensive for modifications, changes, upgrades and labor.
• Current parts (i.e. the condenser) may not be compatible with 13 SEER units, therefore requiring the entire unit be upgraded.
• Coils are 3 - 4 inches taller. This may require additional space such as enlarging the current area or even moving the unit to a different area of the home.
• Condenser units are larger and may require larger concrete pads or roof stacks.
• 40% more Freon is required to operate a 13 SEER unit. Current Freon lines may be too small and may have to be upgraded.

If you've been thinking about replacing your air conditioner or heat pump, now is the time to do before you're required to purchase a more expensive 13 SEER unit. Contact several heating and cooling contractors to get proposals. Don't expect all contractors to have any 10 or 12 SEER units left and available in stock. If you need any recommendations, feel free to contact me.

Wishing you the best,

Dan
dan@DanWeis.com
http://www.HomeBuyingClass.com
http://www.CincinnatiRealEstateHelp.com/

Ways To Lower Your Increasing Utility Bill

With Cinergy raising natural gas costs by approx. 46% and now in January, our electric rate is rising 30%, it's now time to see where you and I can save money on our utility bills.

I know it drives my family crazy, but when I'm home, if I see lights on in rooms with nobody in them, I turn the lights off. I also play the "thermostat game" - how low can I set it before someone else starts complaining? "Spring will be here soon, just not soon enought."

Some thoughts:

Your refrigerator represents approx. 30% of your electric bill and dusting the coils can greatly improve its efficiency. When's the last time you did this? You'll find the coils underneath or behind the appliance. Unplug it before you vacuum the coils.

Another place you may be losing money is if the refrigerator door seal is not tight. You can test this by opening the door, putting a dollar bill again the seal and then closing the door. If you can easily pull out the money, you need a new seal.

Up to 40% of your heating escapes to the outdoors, because of inadequate insulation in the attic and seals around windows and doors. Call Cinergy at 421-9500 and they will do an energy audit for a small fee to help you determine any sizable leaks.

Your clothes dryer uses a lot of energy. You can cut down the amount by putting in one load immediately after another. That way the dryer is already heated. Also, always clean out the lint trap after every load of drying.

Check your water heater. It can really run up your utility bill by keeping water hotter than it needs to be. Also, there are timers that will turn off the heating element when you don't need hot water. If you consistently spend a lot of time away from your home every day, this could be a money saver for you.

Finally, compact fluorescent light bulbs use 25% less energy than regulat light bulbs do. They also last up to ten time longer. I'm not talking about the long fluorescent bulbs found in office buildings, but actually compact bulbs that will screw into ordinary sockets.

If you have any energy-saving tips that you use around your home, please fill out your post on this blog, so you can share with others.

GO BENGALS!!!

Dan

FREE Home & Condo Buyer Classes

Have you been wondering exactly how the home buying process works? Is a bit of 'fear of the unknown' perhaps holding you back from making the important decision to purchase a house or condo in Cincinnati?

It's time again for our Free Home & Condo Buyer classes - Our first class is Jan. 18th at 7:00pm.

As 2006 approaches, we are in a changing real estate market, where in most areas, home sales are not quite as strong as in the past few years, but home sales will continue to be steady in most price ranges. Fixed interest rates are projected to be in the 6.5% - 7.0% range with some peaks and valleys to occur during the year. If you are planning to buy a home or condo in 2006, now is the time to start your education process. Go to http://www.HomeBuyingClass.com for upcoming class dates, location and other details. Don't go out looking at homes or condos without arming yourself with the information you'll learn from this free, 2.5 hour, no-obligation, educational class. There are too many HORROR stories in the marketplace today from people, who didn't know any better - they ended up with a "Money Pit" home or got swindled into a "Bait & Switch" home loan that cost them hundreds to thousands of extra dollars.

PLEASE forward this blog to your family and friends,so they know may take advantage of one of our FREE Home & Condo Buyer Classes in 2006.

Wishing you the best,

Dan
dan@DanWeis.com
http://www.HomeBuyingClass.com
http://www.CincinnatiRealEstateHelp.com

Is It Time To Get Rid Of Your ARM?

Do you have a first or second mortgage that's an Adjustable Rate Mortgage (A.R.M.)?

If you've purchased a property and locked into a super-low rate in the past few years, it's possible that you have an Adjustable Rate Mortgage and if that's the case, with rising interest rates, you should have your current mortgage(s) analyzed to see if it's the right time to switch to a fixed rate mortgage.

With the current interest rate increases, by 2007, most 1-year ARM mortgages will be adjusting to a higher interest rate and that means your monthly payment will be increasing too.

There are 2 types of adjustable rate second mortgages that could cause you problems down the road: 1-year ARMs and Interest-Only (I/O)Mortgages.

In the 1-year ARM scenario, your interest rate will adjust, up or down, every 12 months. An initial low rate can fluctuate as interest rates rise. ARMS are a very popular type of second mortgage used as a "piggyback" mortgage. Piggybacks combine a large traditional 80 loan with a smaller, but higher interest rate, second mortgage so that you can avoid a large downpayment. While most first mortgages have a fixed rate, the problem is some of these piggyback mortgages have an adjustable rate. These piggyback mortgages have been promoted by many lenders to avoid private mortgage insurance. So when the second mortgage interest rate increases, you're stuck with the increased payment unless you re-finance both of your mortgages into a fixed rate product.

In the Interest-Only Mortgage, you only have to pay the interest portion of your mortgage, which means a smaller monthly payment. Most of these loans come with a fixed rate for a period of one, three or five years. The risk with an Interest-Only Mortgage is that you're not building up any equity in your home. Since none of the monthly payment goes towards paying off the principal loan balance, the homeowner can still owe 100% of the mortgage at the end of the fixed rate period.

I am not a fan of these types of mortgages, because I think some lenders don't totally explain the pros and cons of these types of mortgages and all the consumer 'hears' is the low monthly payment amount.

There is a small segment of the market that is suited for these types of loans and is prepared to handle the increases of a more expensive monthly payment. But I'm SHOCKED at the statistics of how many first-time buyers are turning to these types of mortgages, because they offer an initial, short-term, low interest rate. I've read as high as around 30% of all home buyers in the past year took out these types of loans.

Also, if the real estate market changes and home values become stagnant or decline, it could be very difficult to sell your home if you had to unless you brought CASH to the closing table. It's possible that you might owe more than the home is worth.

In my opinion, fixed interest rate mortgages are the safe way to go for many consumers right now and if you have less than 20% for a downpayment, don't be afraid of private mortgage insurance (PMI). PMI has had a bad reputation in the past, but I believe you will see a lot more people struggle in the future with ARMs and Interest-Only mortgages than those who have PMI.

Here is my suggestion to you: I have been working with a particular mortgage consultant for over the past 3 years and he takes a financial planning approach to helping consumers by reviewing which type of mortgage product is best for their situation. His name is Rick Pilger of Trustcorp Mortgage (a mortgage banker).

I have arranged for Rick to provide you with a FREE, No-Obligation, Personal Mortgage Plan Consultation. Rick will call you and ask a few questions about your current situation. Then when you meet, Rick will have prepared a complete, Personalized Mortgage Plan showing you the various mortgage scenarios to see if any of them fit your needs at this time. If you are in good shape, Rick will include you in his "Mortgage Minder Program". This free program allows Rick to assist you in 'managing' your mortgage. He will send you quarterly updates on where you stand in conjunction with the current market, so you will always know if you're in the best mortgage program possible for your situation.

The reason I'm making you aware of this offer is because there are too many consumers being taken advantage of by unscrupulous lenders (even if you have re-financed your home over the past few years with out of state and internet lenders) and you need to have an honest and caring mortgage consultant be on your side to review your situation. Rick and I think alike when it comes to recommending what's best for our clients and treating our clients right. But in the end, it's always your decision. Rick's contact information is (513) 772-2900 and e-mail: rpilger@trustcorp.com.

Wishing you the best,

Dan
Real Estate Consultant since 1985
dan@DanWeis.com
http://www.cincinnatirealestatehelp.com