Payoff Home Mortgage Sooner

There are a lot of things in life do not appear they ways they seem to be.

The other day I was watching TV and normally I just do not pay any attention to the commercials since I have recorded most of the shows I'd like to watch and watch them when I have some spare time। This reverse mortgage commercials kept popping up and in one hour TV program, it had played four times. I did not know much about this reverse mortgage. Then I did some research and found out it is a type of mortgage for senior citizen who worked hard paid off their mortgage and at their senior age they can refinance their sweet equity use non of their income but, the HOUSE, as the collateral. The bank pays small monthly payment to the senior and charges a huge amount of fees. Suddenly something struck me that what is wrong with our society?, Aren't we supposed to enjoy our retirement with children grown, house mortgage paid off and a fat saving account to enjoy our senior life?

We were taught to go to good schools, get good education and later, hopefully, can get a good paying job to buy a nice house in a good neighborhood and raise a good family. We use all the money we have in our checking account since there is no incentive to keep any money in it and it pays no interest. And we are conditioned to not use any money in our saving account or money market account (if you are luckily have one) because these accounts are for rainy days or something unexpected. We were told to buy the biggest house we can afford within our pay checks since mortgage interest normally is fully tax deductible. Here comes our biggest debt, the house mortgage. When the economy was going well and we made a lot of money and bonuses and we then bought more stuffs, new car, bigger house, more cloth, eating out 7 days a week, took lavish vacations and the only thing we didn't do was "saving for the rainy days".

When the economy went downhill like the recent years, job opportunities shank, unemployment rate went over 10%, paychecks were reduced to the minimum in order to hold on to the current job, no more bonuses....., and for the debt we had accumulated during the fat years we have to use high interest rate credit cards to offset our debts. The worse case happened is that sometimes we have no choice but to refinance our home mortgage to reduce the monthly payment or cash-out refinance to pay down some of the debts. Things happen like a circle and when our family grows up, we grow old and we, unfortunately, still have 30 years of home mortgage. We have to restlessly keep working like an old cow. The funny thing is we might not even have any chance for a reverse mortgage!

I have found a very useful site called "Mortgage Professor" thoughtfully written by Jack M. Guttentag, a finance professor at University of Pennsylvania. We all have this experience that when we bought our dream home, we signed hundreds of papers at closing. The page we were told not to look carefully was the 30 years mortgage amortizations because for a $200,000 mortgage we literally have to pay out of our own pocket over $430,000 in 30 years, in which over $230,000 is interest alone! Things I have learned from this website are nothing but great educational information regarding debts and mortgages, which are the two biggest problems we have in our country. I believe, we, as Realtors, not only do we help people to sell and buy homes, we have obligation to help our country out of this economy misery. Yes, we can not do any thing with Wall Street numbers, nor can we drop the unemployment rate to a single digit in few short months. But we CAN do is to educate the people we care about, our family, our friends and our customers. I also believe that if we, at the individual level can get out of debt of any kind, we, at the national level, will be moving towards a happier and prosperous new nation.

If you find this short blog helpful and I hope readers would share this site with clients, family member or any one you care about. Let's work together to reverse our debts not, the mortgage!

Here are some useful calculators from "Mortgage Professor" to help you figure out how and when you can pay your mortgage off:

1. Extra Monthly Payments to Pay Off in Specified Period- For people who want to know how much extra they must pay, above their required monthly payment, to pay off their loan within a specified period.

2. Bi-weekly payment applied Bi-weekly - For people who want to know when their loan will be paid off, and how much interest they will save, if they shift to a biweekly payment plan, and if they make extra voluntary payments in addition to their required biweekly payment.
For example, at $200,000 loan, 6%, 30 years fixed, with no extra payment, just change monthly payment structure to the bi-weekly, you could save almost $50,000 in interest and shortens the 30 years (or 360 months) mortgage life to 295 months!

3. Extra Monthly Payment - For people who want to know when their loan will pay off, and how much interest they will save, if they make extra voluntary payments in addition to their required monthly payment.

4. Refinance One Mortgage - For people trying to decide whether refinancing a mortgage will reduce their costs.

5. Refinance Two Mortgages - For people with two mortgages trying to decide whether refinancing into one or two new mortgages will reduce their costs.

6. How much house you can afford? - For people trying to figure out if they can afford a certain priced house.

7. Mortgage Amortization Calculator - For people who want to know their amortization schedule that shows the tax savings on the interest they pay, for their tax bracket.

Will Home Improvements ADD VALUE to your home?

About 6 in 10 recent home buyers will consider remodeling their new home in the next 3 to 6 months. Determine whether a home improvement will add value to your home could be complicate. When consider improving the condition of your home by adding room, renovating kitchen and baths or expanding your attic or even landscaping your yard, it could make you a lot of return in the future and it could also cost you a fortune and not be able to add any value.

We all have seen the HGTV’s home improvement shows. There are some factors to consider when it comes to home improvement.

1. Your budget. When making a dollars and pennies evaluation, first is to have a proposed budget in mind. Then based upon your budget includes the following factors such as building materials, labor, building (county and/or city) permits and any potential changes to your homeowner's insurance.

2. If you have a vacant home, the next thing you have to put into consideration is the mortgage payment. Can contractors finish the project within the time frame? I have seen a contractor doing a 2-month project and did not finish the job until almost a year later. You need to have a back up plan if the contractor is lack of performance or if you have extra cash for the mortgage payment while the home is vacant and under the renovation.

3. Improvements will add the positive value. According to the Remodeling magazine’s 2006 annual Cost vs Value Report, within the top 10 nationally measured projects, an upscale fiber cement siding replacement, midrange vinyl siding replacement and wood window replacement are the top 3 projects have a highest return due to their energy efficiency.

Average nationwide return on investment:
Bathroom remodel - 84.9%
Major kitchen remodel - 80.4
Deck addition – 76.8%
New roof – 73.9%
Master suite addition – 72.6%
Family room addition – 71.5%

4. Improvements might add negative value. As the housing market cools, you need to think twice for the improvement or upgrade which might negatively affect value of your home. According to Remodeling magazine's annual cost vs. value survey, you can get a very good return on kitchen and deck remodeling. However, adding a swimming pool (the safety concern for a family with small children and the extra cost for maintenance), the addition of a huge room (what other homes look like in the neighborhood? Would the addition fit within the neighborhood?), trendy finishes (too update? Or what the house will look like in 5 or 10 years) and the Jacuzzi (a Jacuzzi in the master bedroom is fine. However an outdoor Jacuzzi with a 15 jet streams could raise buyer’s concern for maintenance and the power consumption) might drive your potential buyers away.

5. DIY. You can save a significant amount of money if you can do the jobs yourself. One tip to remember is that you can save money by hiring yourself but make sure to do the jobs like a Pro. If you can not handle the jobs, hire professionals (licensed plumbers, licensed electricians or licensed and bonded contractors).

Finally, the type of improvements you would like to do and how it will fit within other homes in your neighborhood might have a huge impact on your return. For instance, for a neighborhood with two or more baths, adding extra bathroom will increase the value of your home. However, for a neighborhood with homes at average about 1500 square feet, adding a big room will not be a wise decision. In addition, your local real estate market plays an important role in home improvement. If the market is hot and it is the seller’s market, you might luckily get a good return for the money you have invested. Contrarily, if the market is soft and there are more inventories of homes on the market, you might get none or little payback for what you have spent. Remember, while you live in your home and enjoy all the happiness and comfort that your home offers to you, always do your home work when it comes to home improvement and remodeling.

Websites I found to be useful to this topic
http://www.hgtv.com/ - the Home & Garden Television Network has free resources for decorating, remodeling, and gardening.

http://www.diynetwork.com/diy/home_improvement - The source for the best do-it-yourself tips for home renovations.

http://www.bobvila.com/ - Do it yourself with help from home improvement and remodeling expert Bob. You can also find a “How to library” and live Videos with Step-By-Step, How Tos, etc.

Linda is a licensed realtor in Georgia. When it comes to selling, buying or investing, Linda is here ready to serve all your real estate needs.

Georgia Dream $14,000 downpayment program for buying a foreclosed home

What a great time to buy!!
Credit eligible borrowers may now qualify for $14,000 in repair and/or down payment assistance through participating lenders to buy and rehab a FORECLOSED home in the state of Georgia (some income, credit limitations may apply)। Buyers can purchase and renovate a single family homes, townhomes and condos all priced up to FHA allowed। On top of the first time home buyer's $8,000 federal tax credit, all borrowers pay back this zero-interest second mortgage only when the property is sold, refinanced or is no longer used as primary residence. It is forgivable after about five and half years.