NOTICE OF INTEREST OVERPAYMENT – that is how the letter started from Equity Plus. It then went on to read:

“According to our records you have not elected to participate in our bi-weekly mortgage program. The program could save you $40,000 to $100,000 in interest and reduce your mortgage term by 7 to 9 years.

What the letter says is “true”, but what they don’t say is that you have to pay for this privilege! Nor do they mention that you can do this yourself without paying them a hefty fee.

I also received a “nice” letter from a company in Palatine, IL, concerning a “Mortgage Protection Plan”. Now that I have a new mortgage I should protect myself and my loved ones from the loss of our home in the event of death, disability, chronic illness, critical illness or terminal illness (I guess they covered all the bases!). Why should I buy overpriced insurance? I already have life insurance to cover me.

It’s amazing the amount of junk mail that you get after you refinance a mortgage! Your best bet? Throw it out, or if you have a fireplace, maybe use it for kindling!

Hi there - could you help spread the word about A Penny Saved? We rely on word of mouth to get new readers. If you would send someone a link, email, or even mention it to your friends, I would truly appreciate it. Refuse that Offer! is a post from: A Penny Saved, the best darn personal finance blog around.

I called Wells Fargo to check on the status of our Home Mortgage Refinance – we have been approved! Just waiting now for formal notification in writing (or by email). The refinancing lowered our monthly payment by over $90 per month, but we will be paying an extra $100 on the principal every month so we can pay the loan down faster. So by refinancing (and making the extra payment which is only a little more than our current payment) we will reduced our loan length by over 4 years. And the refinancing did not cost us anything. Sweet!

If I get a raise this year (which I should find out hopefully by the end of October) I hope to take some of that raise and pay even more on the principal every month. I would love to get this paid off within 20 years (even less if possible).

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We got all our refinancing paperwork completed and sent it by UPS (prepaid by Wells Fargo). The process was really easy – they called me to see if I wanted to refinance (no cost refinance), I said yes, they sent the paperwork which just required signatures and a notary (we have a friend who is one so this was free for us also), and we were done. I think the whole process took two hours of my time including driving to the notary and driving to a UPS pick up location. It really was a painless process, so hats off to Wells Fargo for making this easy. And for saving me some serious money!

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Dear JD – On behalf of Wells Fargo Home Mortgage, I would like to thank you for the opportunity to serve you.  Your loan has been completed, and you will be receiving your loan Closing Package within the next 5 to 7 business days – as the letter says we are on our way to refinancing!

Our current loan is at $136,000 (give or take a little!) at 4.75%. The new rate will be 4.125%. Our monthly payment will go from approximately $752 down to about $660 (will not know exactly until at closing) – a savings of about $92 a month! We will continue to pay at least $752 each month, more likely a little more than that. By doing so, we will reduce the length of the loan by at least 4 years which will put us ahead of where we are now.

The great thing about this refinancing is that although it is not the lowest rate being advertised out there, it is a no cost deal for us! Of course I double checked this with the “Truth in Lending Disclosure Statement” and the “Good Faith Estimate” documents we received and no costs are listed. So I am going to go ahead and pull the trigger.

Once all the dusts settles I will calculate the exact savings and the number of years/months we will be shaving off the loan – and of course the amount of interest we will be saving!

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I have been thinking about refinancing my mortgage since rates have plummeted again. My current 30 year mortgage is 4.75% with Wells Fargo. After talking with a representative, I could refinance into another 30 year mortgage at 4.125% with no closing costs. It would take my payments from approximately $752 down to $660, although we would continue to make the $752 payment to decrease our mortgage length and interest. By doing so we would reduce our mortgage by four years (from the length it is now).

What I would really like to do is move into a 20 or 15 year mortgage but I cannot quite swing the monthly payment, it would be tight and could lead to a cash flow problem if inflation keeps rising. So if I do pull the trigger on the 30 year mortgage refinancing, we would try to pay as much extra as we could each month so we could shorten the number of years (and interest).

The biggest downside for us about refinancing is starting the 30 year clock over again, but based on my rough calculations if we continue to pay at least what we currently pay we will come out ahead year wise – just need to be diligent!

As I said we haven’t pulled the trigger yet. We have locked in a rate, but do not have any obligations or risk if we back out. I have about a week before I have to decide whether to pull the refinancing trigger or not!

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First we got hit with an earthquake (no damage for us). Then we got hit with a hurricane (lost power for a day, minor landscape damage). Then we got hit with flooding in our area (we were safe, but I have friends who were not so lucky). This is the kind of season where it pays to know your home owners insurance!

I  have a friend who has family outside of Philadelphia where the hurricane really hit hard, mostly in flooding. The friends family suffered extensive losses in their basement from a “creek” that rose rapidly and flooded a whole section of their neighborhood. They lost their hot water heater, furnace, and most of what they had stored in their basement (it was a walk out basement).

Their neighbors suffered damage too – and their insurance agents wouldn’t even come out to see them – no flood insurance, no bother. My friends family was able to persuade their agent to come out – and he noticed something. They had a sump pump. He asked if they lost power. They said yes (they lost power for several days). He took a few pictures, wrote some notes down, went out to his truck, checked their insurance policy online. In about 10 minutes he came back in with a check for $5000. Because they had a sump pump, and it did not function because of loss of electricity, their policy would cover damage from water up to $5000. It probably will not cover everything, but it was a big help.

Their effort to convince the agent to come out paid off. His knowledge of policies and willingness to help paid off. Another example of how important it is to know your insurance policy, and to have the right agent.

Maybe with all the things that are happening around here I need to dust off our policy and take a read!

 

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In the early 2000′s, investing in real estate was a popular investment vehicle but it has become increasingly unpopular due to the housing bubble bust that left many investors broke and in dire straits. Since then many have been reluctant to throw their hat into the ring but there are still many different ways for people to make investing in real estate a viable option.

Guiding someone through the process can seem confusing but there are good ways to help people either manage their current mortgage or put money in the overall housing marketing. It’s a lot more complicated than working the stock market given that there are many web sites out there boasting incredible returns and it’s hard to know whom you can trust. Though some of the guesswork has been taken out of the equation with real estate agent marketing, it’s still good to have some basic ideas down before you start investing your family’s financial future.

The average number of homeowners has been on decline and the proportion of mortgage holders who have defaulted on their home loans and rental properties has caused major concerns in the industry. This has led way for a new market for those who find the idea of investing or owning a home an enticing option. Currently landownership has proved to be a solid investment. It’s a simple matter of supply and demand. Purchasing property for renting purposes has become a popular way for people to become financially solvent due to the steady revenue stream that it provides. The property owner, or landlord, is responsible for the mortgage and additional costs of upkeep and but any additional money received from rent that surpasses these costs is your net earnings. As the mortgage is paid down so will the profit from the property.

Real estate investment groups (REIG) are designed for investment purposes. They’re similar to a mutual fund but on a smaller scale. This is another option for those who don’t want to be directly responsible for a property. People can place their money in these groups and is great for those who don’t want the hassle of being a landlord.

A REIG works as follows: A real estate investment group owns a block or series apartments or condos and allows investors to buy them through the company. There isn’t a single investor that’s the sole owner of a property but the ownership is distributed among many shareholders. Several properties are a part of this and it’s spread out among a varying number of investors. Usually a company manages the maintenance and upkeep. This company takes care of everything including advertising and the interview process. This is done in exchange for a percentage of the monthly rent. This has proven to be a solid investment strategy for many looking to diversify their holdings.

On the flip side the other option for investors is a Real estate investment trust (REIT). This is, in a way, a marriage between Wall Street and real estate. A REIT is crated when a corporation or trust uses investors’ money with the purpose of buying, operating, and managing income properties. These properties are bought and sold on the major exchange like any other stock. This is a way to provide a regular income to investors. These properties usually include non-residential properties such as malls, office buildings, and other commercial properties. These are highly liquid investments and you don’t need a realtor in order to invest.

These are just a few of the options available to consumers towards the purposes of real estate investing. There are many different variations on these with an equal measure of varied risk but for anyone looking to invest, this is a good place to start. There’s a lot of potential but, as the market has show in recent years, it’s always important to tread carefully and not buy into fad investments. With anything, it’s good to weigh the costs and benefits before acting and you’ll always find yourself in better standing.

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My neighbor is being a pain. Now that in some ways is an unfair statement because I could just ignore him, but sooner or later I will have to address it and I would rather do it now. So what am I talking about?

Our property is 0.66 acres, and I only have 3 neighbors, one to the side of me, one across the cul-de-sac, and one behind us who I hardly ever see (our houses are pretty far apart). The other side is Amish farmland (beautiful!). The neighbor to the side of us is very particular about everything, to put it nicely. Just as an aside, my neighbor across the street and I have both stopped giving him recommendations of individuals or companies when he asks us for our opinion on products or services because we don’t want to put our friends or companies we like through what they would have to go through to please him! If they could ever please him.

Well, the other day I was finally able to get outside to do a few things in the yard.  He came over to see me, so I knew there was going to be trouble. He only talks to me when he wants something. Anyway, he believes that part of my mailbox garden is on his property and he wants me to move it. Now the thing is, there is no property boundary marker at that point. We both have to guess – but he is guessing that I am over the imaginary line!

Now, I could be over the line. Or I could not be over the line, neither of us really knows for sure. I am not opposed to moving some of my plants if indeed I am over, because that is only right. But I am not really in the mood to dig things up just because he thinks I am over the line and we both know that neither of us is sure about that.

So, I have wanted to have a surveyor come out for a while now, not just for that, but also so I know where my property line is on the side to the Amish farm. I would like to put up a split rail fence some day along that edge, and I want to make sure that I put it in the right place (the Amish Farmer really doesn’t care because he can’t farm right up to the edge anyway –  but it’s the right thing to do). Anyway, I called a surveyor – between $500 and $800 to mark off the boundaries! That’s definitely going to be a wait.

Until I can save up, I will move a few things to see if that appeases my neighbor.  If not, I will gently ask him to get a survey since he is the one that is concerned!

Frustrating. How are you and your neighbors?

 

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This lesson in our Dave Ramsey class was our next to last class! We have been through 12 weeks of Dave and lived to tell about it

This lesson was on Real Estate. He broke it down into selling Real Estate, buying Real Estate, and paying for Real Estate. On the selling side he gave some basic tips on how to prepare your house to sell – fix it, clean it, declutter it, and use a realtor always. That last tip I disagree with. He gave some statistics on how on average you make more with selling your house with a realtor than without one. Personally, I have used a realtor and been pleased, and I have sold my house myself and been very pleased. Basically a realtor helps you price your house, stage your house, advertise your house, and do the paper work. The first three of those you can do yourself with some basic research or even by buying a book. The last one, the paperwork, you will need someone, but you don’t need to pay 6% or more to get that. You can hire someone for a fixed fee to do that and save yourself some money. Just remember though that it is work and it will take time to sell yourself.

The second part, about buying a house was kind of week. Things like try to get a deal (well yeah, of course). Have someone inspect it – I have had mixed results on inspectors. Personally, bring someone along who knows something about construction and plumbing (whether it is a friend or a hired set of eyes). I think you will be better off and get more useful information.

The last part about paying, he would love if everyone paid cash, but admits that Real Estate loans are not necessarily bad. Just try to do a 15 year loan verses a 30 and always do a fixed rate loan. Not bad advice, but I had to do a 30 year loan to help with our cash flow. We hope to pay it off early (and our working on it!) but I like the flexibility of being able to pay extra or not pay extra and not being locked in to a higher payment. But that’s just me.

All in all it was a good lesson, but it didn’t have much for me. But I saw several people who seemed to learn a lot from it.

Now just one lesson to go!

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My neighbor came over the other day and trimmed the branches that were overhanging my roof and ruining the shingles. He has a pole trimmer with an extension that could reach. This had to be done before the guys came to do our roof and i didn’t have the equipment. Thanks neighbor!

Also, one of the guys from church came by to measure the roof. He is a builder and does remodeling projects. He says that our roof is pretty simple and that the church crew should be able to do our house in a day. It looks like they may do it in October (they want cooler weather!). He also brought by some shingle samples – 30 year architectural shingles. They looked great! We are going with a variegated brown shingle that has some hints of red. I say we – my wife picked it out!

We are pretty excited. We have hated the shingles on our roof since we moved in 7 years ago, but couldn’t justify the cost of replacing. The green shingles do not match the rest of the house, but of course that was par for the course for this house (the paint colors or wallpaper didn’t match either!).

I can’t wait to see the new roof!

Hi there - could you help spread the word about A Penny Saved? We rely on word of mouth to get new readers. If you would send someone a link, email, or even mention it to your friends, I would truly appreciate it. Update on Roof is a post from: A Penny Saved, the best darn personal finance blog around.