Category Archives: Buyer Tips

Tips To Help You Purchase the Home of Your Dreams

Rule to Grow Rich By #2: Refinancing Your Home

Posted on May 20, 2008 | 8 Comments

This is part two of a series where we’ll be looking at the real estate-related rules in Money Magazine’s “25 Rules To Grow Rich By”. We’ll be taking these rules one-by-one and going in-depth as to whether it’s a rule “to grow rich by” or not. Take a look at the rules we’ve covered at the 25 Rules list.

Rule 2: It’s worth refinancing your mortgage when you can cut your interest rate by at least one point.

I agree with the premise of this rule – it’s usually a good idea to refinance your mortgage loan if you have a chance to cut interest. Especially if you’re early in the life of the loan a 1% drop in your interest really adds up over the course of the loan.

Did you know that the overall percentage of the average homeowner’s income that goes to pay their mortgage has risen 12.6% from ten years ago? That can leave many people scrambling for some sort of relief – a refinance may be a way to do so.

The Reasons Why People Refinance

Mortgage Refinance | What options do owners have?

If you’re looking to refinance, there are many other reasons why you might be considering doing so. For example, you might be under an adjustable rate mortgage (ARM) – which I usually do not recommend for homeowners – and switch over to a fixed rate mortage. You might want to reduce your monthly debt load by rolling your unsecured debt into your mortgage as a temporary fix to your credit situation. You may want to refinance your mortgage into a shorter term – this allows you to pay off your loan faster and build your equity quicker. For example, you might want to take your 30 year mortgage and drop it down to a 20 year loan or even a 15 year loan.

By dropping your loan in terms of total years, you’re really getting a handle on your mortgage. Dropping your mortgage down by a percentage point may often not make a very big difference in the long run in the total mortgage interest you’ll pay in general. But if you get a short term mortgage, especially combined with the lower interest, this will really make a big dent in the interest you’ll be paying over the life of the loan.

What You Need to Know About Mortgage Refinance

There are some hidden costs you need to be aware of when refinancing your mortgage. You’ll have to pay lender fees, which can include points, origination, credit report, application, and appraisal. You may have to pay third-party fees – these vary by state and mortgage company and can include title exam, title insurance, closing, and recording. These closing costs can range from 2% to 3% of your loan amount.

To put it blunty, if you make a mortgage refinance decision, you do it for the long term. It must benefit you over the long haul – it must make sense in this future view context! If you think you might be moving relatively soon, then just stop thinking about refinancing your mortgage. Be aware of what’s out there and don’t get suckered into many of these no cost refinance advertisements you may see on television and get into a bad mortgage refinance decision that can cost you money, time, and major headaches down the line.

As for the topic of refinancing your home to pay off credit card debt, I’d recommend you stay away from this course of action for the most part. Statistics show that more than 85% of people who refinanced to pay off their credit card debt return to the same level of credit card indebtedness within 2 years. Don’t fall into that credit card debt cycle.

This is just such a complex and important subject it’s very hard to recommend any course of action as a blanket path for everyone to take in this situation. You really need to take into account your particular situation, learn what you can about the refinancing process, get yourself a reputable professional that can assist you and then it’s time for you to make your decision.

Revised Rule #2: Refinancing your mortgage is a viable solution if you focus on the long-term and are able to save yourself money in the way that makes sense to you.

Jump Back to Rule #1 | 25 Rules | Jump Forward to Rule #3

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Paging Dr Microsoft: Xbox 360 Comes to Children’s Hospitals

Posted on May 10, 2008 | 1 Comment

I’ll admit it: I like playing video games. Hard for me to turn down an invite to play some multiplayer Madden NFL. I always pick the Miami Dolphins, of course.

So that’s why I became really excited when I heard about the latest Xbox360 video game news – and how Microsoft is using technology to help kids.

What is the Xbox360

Microsoft Xbox 360 Elite | Hospitals Get It Now

The Xbox 360 is the latest video game system from Microsoft, replacing the older Xbox 1. The 360 was released in 2005, and has been home to many top video game titles, such as Halo 3 and the infamous Viva Piñata. The 360 also has a well-known online gaming service known as Xbox Live, which allows players to play with each other at the same time using Xbox 360 game titles – this includes such features like voice and video communication with players around the world while playing your video games together. Xbox Live has now become the world’s largest social network connected to a television.

Where’s the Microsoft-Hospital connection

Microsoft, along with the Companions in Courage Foundation, is sending hundreds of Xbox 360 kiosks to playrooms at children’s hospitals – allowing the kids in these hospitals to have an outlet to play and have fun.

Each of these Xbox 360 kiosks will have video games, television shows, movies, and a connection to a special version of Xbox Live. This specialized private network will allow hospitalized kids to play video games and communicate with each other over this safety-enhanced service – thereby connecting hospitalized children across the country. Robbie Bach, who’s the president of the Entertainment and Devices Division at Microsoft, will be attending some of these functions to commemorate the launch of this service.

“Microsoft is committed to keeping kids entertained in a variety of ways within a safer gaming environment, so partnering with Companions in Courage to offer children in hospitals a way to connect through something as universal as games is a natural fit for the work we do,” said Bach. “The goal for this program is to give these kids a chance to have some fun and just be kids.”

What exactly is going to be on these Xbox hospital kiosks?

Microsoft Xbox 360 Kiosk | Children\'s Hospitals Will Get Them

These hospital-friendly customized Xbox 360 kiosks are going to come pre-loaded with Y-rated television shows, G-rated movies, video games which have been rated E and E10+. They’re going to come with Xbox 360 headsets and Xbox Live Vision Cameras, so the kids can really have fun talking to each other while playing the games. They are also going to have restrictions on content that might not be kid-friendly and only available during certain times, so that kids can have their rest.

“Entertainment, creativity and personal connections can be important factors in alleviating some of the isolation and discomfort these children experience each day” said Companions in Courage founder and National Hockey League Hall of Famer Pat LaFontaine. “Xbox 360 offers young patients a fun escape through games, TV shows, movies and positive interactions with others over the Xbox LIVE network. These gaming stations are a perfect complement to the interactive playrooms.”

What’s in it for Microsoft?

This is a great thing that Microsoft is doing for these hospital kids. Let’s not forget though, Microsoft is a business. And as a business, decisions must make some sort of financial sense. So let’s go through this deal and see why Microsoft has taken this seemingly altruistic approach.

If you look a little beneath the surface, you see that Microsoft is directly targeting their target market: young children. Video games can be played by children of all ages (Me included) but generally and historically, children tend to be the largest audience. So what’s happening here is that Microsoft is generating brand loyalty and brand recognition among these kids, who might end up purchasing an Xbox 360 video game unit once they’re discharged from the hospital. The association people have of the Microsoft and Xbox brands are also getting a huge boost. Psychologically speaking, there is now an emotional association between the Microsoft Xbox and the healing powers of the hospital. As the kids feel better and happier when playing their games – and the parents are happy seeing their children happy – they learn to associate the Microsoft Xbox with fun, happiness, and wellness.

“It’s extremely gratifying to witness the joy and excitement of these children and teens when they have a chance to break away from the normal hospital routine, and make new friends while playing video games,” said Cynthia Sparer, executive director of Morgan Stanley Children’s Hospital of New York-Presbyterian. “We are grateful that our partnership with Companions in Courage helps us meet the needs of our patients and allows kids to be kids even when they’re sick.”

Think of the marketing aspect of this move by Microsoft. Word-of-mouth referrals from the kids who played these video games in their hospital stay to their friends of the same age who are also likely to be video game players. They are tapping into a market that has been undeservedly ignored by most companies out there. While most companies tend to avoid markets like hospitals for fear of a negative association of illness to their product, Microsoft has taken the completely opposite approach! Their product line is now getting a boost from the good-will they have given. With Microsoft’s often shaky reputation due to questionable security and digital rights management practices, this is a definitely a boost to their public relations persona.

How you can use this to help your marketing

Bill Gates & Master Chief | Microsoft CEO & Halo 3 Superhero

  1. Find an untapped social market
  2. Create a customized product for this market (could be a physical product or intellectual property such as a website, book, ebook or audiobook)
  3. Partner with others already involved in that area (like Microsoft did by partnering with Companions in Courage)

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How to Choose The Right Closing Date

Posted on May 5, 2008 | 2 Comments

Closing dates are one of the most stressful dates for any real estate deal – this is the meeting when you complete the real estate transaction and contracts are signed, transferring ownership of the real estate in question.

Not only are there so many important items to take care of during the weeks leading up to your closing but the closing itself brings its own brand of heavy stress. It’s during times of high stress that we make mistakes – and a mistake at the closing table can mean huge money you could be losing in the future – in the form of lawsuits or wasted time.

When to have the closing

Alarm Clock | Keep it handy for your real estate closing

I know there’s urgent events going on in your life. You may be moving and you’re trying to get that taken care of. Maybe you have tons of business items you need to get a hold of. However, I want you to want to pick a closing date that’s convenient to the lender. Yes, that’s right, think about the lender. More importantly, think about the good it’ll do for you having a date that’s convenient for the lender. If you choose a date and time where the lender won’t be as busy as usual, you’re going to save massive amounts of time and massive amounts of money that you would’ve spent on aspirin from the headaches you would’ve had.

Days: Pick Tuesday, Wednesday or Thursday. This is going to assure you get the top closing agent – plus you’re going into the office at non-peak hours so they won’t be in as much of a rush to get it done and get you out. On top of that, the usual lender closing agent may have taken that Friday or Monday off so you may get a second-tier closing agent – and you only want the best for your transaction.

Weeks: Pick your closing date to land on the 2nd or 3rd week of the month. You definitely do not want to set it for the 15th of the month either. This time of the month is non-peak so you and your file will get more attention, usually assuring your closing will be done on time.

Time: Choose from 11am to 3pm EST, especially if the parties may be on opposite sides of the country. This assures all items and packages have been received by all parties and gives some room for any unforeseen items that need to be transferred.

Get your inspection done early: As a buyer, you’re going to want your inspection done early to avoid any problems later on. TIP: Write down serial numbers of all major appliances (refrigerators, washers, dryers, etc). The reason I recommend you do this is that I’ve seen some sellers try to switch appliances after the inspection for older, broken down models – and you have no proof they did this. Sometimes they try to get real smart and switch it for the same model, just a broken version they had in a shack someplace. When you have that serial number at hand, you can feel secure you have written proof.

The importance of following the right closing procedures

The Bankers Draft | Get on your loan officer\'s good side

If you’re a buyer, you’re under contract with a seller, not a lender. The lender has no responsibility to you to close the loan on the date you want. If you’re not the persistent type, you’re going to have to learn new skills. I’ve seen so many lenders try to push dates around. You want to keep in constant contact with the loan officer – call them every few days. Make sure the loan officer has your closing documents all nice and done. Keep reminding them to keep your closing file on top of their pile – you want them to give you the attention you deserve. It often helps to tell the loan officer you’ll likely close a day early – this may give your file special attention.

Most importantly of all, when looking for a lender, you want a lender that’s known for quality service and that is known to keep their commitments when it comes to the closing date. A lot of the tips I’ve given you won’t even need to be used with a top-notch closing company because they do all the heavy lifting and it’s a dream experience for you. Don’t focus so much on saving a little money and focus on getting a quality loan officer on your team. Keep your sanity and get yourself a top-notch lender!

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