Gary May Group – Real Estate

First Mortgage Loans

Although your monthly payment may be higher, you can save tens of thousands of dollars in interest charges by shopping for the shortest-term mortgage you can afford. For each $100,000 you borrow at a 7% annual percentage rate (APR), for example, you will pay over $75,000 less in interest on a 15-year fixed rate mortgage than you would on a 30-year fixed rate mortgage.

 You can save thousands of dollars in interest charges by shopping for the lowest-rate mortgage with the fewest points. On a 15-year $100,000 fixed-rate mortgage, just lowering the APR from 7% to 6.5% can save you more than $5,000 in interest charges over the life of the loan, and paying two points instead of three would save you an additional $1,000.

 Check the Internet or your local newspaper for mortgage rate surveys, then call several lenders for information about their rates (APRs), points, and fees. If you choose a mortgage broker, make certain to compare their offers with those of direct lenders.

 Be aware that the interest rate on most adjustable rate mortgages (ARMs) can vary a great deal over the lifetime of the loan. An increase of several percentage points might raise payments by hundreds of dollars a month, so ask the lender what the highest possible monthly payment might be.

Mortgage Refinancing

 Consider refinancing your mortgage if you can get a rate that is lower than your existing mortgage rate and plan to keep the new mortgage for at least several years. Calculate precisely how much your new mortgage (including points, fees and closing costs) will cost and whether, in the long run, it will cost less than your current mortgage.

Home Equity Loans

 Be cautious in taking out home equity loans. The loans reduce or may even eliminate the equity that you have built up in your home. (Equity is the cash you would have if you sold your house and paid off your mortgage loans.) If you are unable to make payments on home equity loans, you could lose your home.

 Compare home equity loans offered by at least four reputable lending institutions. Consider the interest rate on the loan and the annual percentage rate (APR), which includes other costs, such as origination fees, discount points, mortgage insurance, and other fees. Ask if the rate changes, and if so, how it is calculated and how frequently, as this will affect the amount of your monthly payments.

Home Purchase

 You can often negotiate a lower sale price by employing a buyer broker who works for you, not the seller. If the buyer broker or the broker’s firm also lists properties, there may be a conflict of interest, so ask them to tell you if they are showing you a property that they have listed.

 Do not purchase any house until it has been examined by a home inspector that you selected.

Renting a Place to Live

 Do not limit your rental housing search to classified ads or referrals from friends and acquaintances. Select buildings where you would like to live and contact their building manager or owner to see if anything is available.

 Remember that signing a lease probably obligates you to make all monthly payments for the term of the agreement.

Home Improvement

 Home repairs often cost thousands of dollars and are the subject of frequent complaints. Select from among several well established, licensed contractors who have submitted written, fixed-price bids for the work.

 Do not sign any contract that requires full payment before satisfactory completion of the work.

Major Appliances

 Consult Consumer Reports, available in most public libraries, for information about specific appliance brands and models and how to evaluate them, including energy use. There are often great price and quality differences. Look for the yellow Energy Guide label on products, and especially for products that have earned the government’s ENERGY STAR®, which can save up to 50% in energy use.

Once you’ve selected a specific brand and model, check the Internet or yellow pages to learn what stores carry the brand. Call at least four of these stores to compare prices and ask if that’s the lowest price they can offer you. This comparison shopping can save you as much as $100 or more.

Heating and Cooling

 A home energy audit can identify ways to save up to hundreds of dollars a year on home heating (and air conditioning). Ask your electric or gas utility if they audit homes for free or for a reasonable charge. If they do not, ask them to refer you to a qualified professional.

 Enrolling in load management programs and off-hour rate programs offered by your electric utility may save you up to $100 a year in electricity costs. Call your electric utility for information about these cost-saving programs.

Telephone Service

Once a year, review your phone bills for the previous three months to see what local, local toll, long distance, and international calls you normally make. Call several phone companies which provide service in your area (including wireless and cable), to find the cheapest calling plan that meets your needs. Consider a bundled package that offers local, local toll and long distance, and possibly other services, if you heavily use all the services in the bundle.

Check your phone bill to see if you have optional calling features or additional services, such as inside wire maintenance, that you don’t need. Each option you drop could save you $40 or more each year.

 If you make very few toll or long distance calls, avoid calling plans with monthly fees or minimums. Or consider disconnecting the service altogether and use dial around services such as 10-10 numbers or prepaid phone cards for your calls. When shopping for dial around service, look for fees, call minimum, and per minute rates. Treat prepaid cards as cash and find out if there is an expiration date.

 If you use a cell phone, make sure your calling plan matches the pattern of calls you typically make. Understand peak calling periods, area coverage, roaming, and termination charges. Contracts offered by most carriers will provide you with a trial period of 14 days or more. Use that time to make sure the service provides coverage in all the places you will be using the phone (home, work etc.). Prepaid wireless plans tend to have higher per minute rates and fees but may be a better option if you use the phone only occasionally.

 Before making calls when away from home, compare per minute rates and surcharges for cell phones, prepaid phone cards, and calling card plans to find how to save the most money.

 Dial your long distance calls directly. Using an operator to place the call can cost you up to $10 extra. To save money on information calls, look the number up on the Internet, or in the directory.

www.pueblogsa.gov

DOE announced on July 19 a series of initiatives to more broadly implement cool roof technologies on DOE facilities and buildings across the country. As part of the new efforts, DOE will install a cool roof, whenever cost effective over the lifetime of the roof, during construction of a new roof or the replacement of an old one at a DOE facility. Buildings use 40% of all U.S. energy and contribute about 35% of greenhouse gas emissions in the United States. Cool roofs rely on lighter-colored roofing surfaces or special coatings to reflect more of the sun’s heat. Re-roofing for DOE headquarters in Washington, D.C., will begin this summer. Similar efforts are also underway at DOE’s Idaho National Laboratory and Brookhaven National Laboratory. Together, these projects will cover more than 350,000 square feet and save thousands of dollars for taxpayers annually.

As an example of a project already underway, the National Nuclear Security Administration (NNSA), a separately organized agency within DOE, has already installed more than two million square feet of cool and white roofs at NNSA sites across the country. Through the Roof Asset Management Program, NNSA currently saves an average of $500,000 a year in energy costs and expects to save more than $10 million over the next 15 years. Overall, NNSA has reduced building heating and cooling costs by an average of 70% annually on reroofed areas by installing cool roofs and increasing insulation.

While announcing the new initiatives, Energy Secretary Steven Chu also issued a letter to the heads of other federal agencies, encouraging them to take similar steps at their facilities. To offer additional support for federal and commercial building operators considering cool roofs, DOE released its “Guidelines for Selecting Cool Roofs.” The guidelines provide technical assistance on types of roofing materials and the selection of a roof that will work best on a specific facility. These measures follow President Obama’s Executive Order on Sustainability, issued in October 2009 and under which the federal government committed to reducing its greenhouse gas emissions 28% by 2020.

DOE is also expanding its cool roof research to enable technological innovation and guide policy implementation. The effort includes developing advanced testing protocols, conducting urban heat islands, and undertaking studies to further quantify the direct global cooling benefits associated with cool surfaces. A recent study by DOE’s Lawrence Berkeley National Laboratory (LBNL) found that using cool roofs and pavements in cities around the world can help trim the demand for air conditioning, decrease temperatures for entire cities, and potentially cancel the heating effect of up to two years of worldwide carbon dioxide emissions. The Department also anticipates awarding new projects to develop higher performing, new innovative roofing materials under the DOE’s Small Business Innovation Research grant program.

www.usa.gov

By July 1, all mortgage servicers participating in the Making Home Affordable Program will offer extra help for homeowners struggling to make their monthly mortgage payments because of unemployment. The Unemployment Program will offer homeowners a forbearance period to temporarily reduce or suspend their monthly mortgage payments while they seek re-employment. 

The minimum forbearance period is three months, although a mortgage servicer may extend it depending on the investor and regulator guidelines. If a homeowner becomes re-employed in that time, the forbearance period will end and the homeowner will be evaluated for a mortgage modification under the Making Home Affordable Program. Unemployment benefits will no longer qualify as income for the mortgage modification program.

During the forbearance period, a homeowner’s monthly mortgage payment must be reduced to no more than 31 percent (or less) of their gross monthly income. The servicer can decide to temporarily suspend payments in full. The payment amount and due dates will be decided by the servicer depending on investor and regulator guidelines.

To qualify, a homeowner must meet the following eligibility criteria:

• The mortgage must be a first lien mortgage, originated on or before January 1, 2009, and the unpaid principal balance must be equal to or less than $729,750 for a one-unit property.
• The property must be the homeowner’s principal residence.
• The mortgage has not been previously modified through a Home Affordable Modification.
• The homeowner was ineligible for a Home Affordable Modification.
• The homeowner is either behind on payments (but not by more than three consecutive months) or it is reasonably forseeable that the homeowner will fall behind.
• The total monthly mortgage payment is greater than 31 percent of the homeowner’s gross monthly income. If the payment is less, it is up to the servicer’s discretion if they will offer the program to the homeowner.
• The homeowner will be unemployed at the start of the forbearance period, and is able to document this because they will be receiving unemployment benefits in the month the forbearance period begins (even if the benefits expire before the forbearance period ends).

A mortgage servicer may require that, based on investor and regulator guidelines, homeowners have received at least three months of unemployment benefits before they begin a forbearance period.

There is no cost to apply to the Unemployment Program, although late charges may accrue while the homeowner is being evaluated for the program or in the program. A mortgage servicer may not collect late charges from the homeowner while they are still in the forbearance period.

Servicers may not initiate foreclosure proceedings or conduct a foreclosure sale while a homeowner is being evaluated for the Unemployment Program or in the forbearance period.
To determine if you qualify for the Unemployment Program, contact your mortgage servicer. You should learn your eligibility within ten days of submitting complete documentation to your servicer.
If you have any questions after speaking with your servicer, or need assistance applying to the program, call 1-888-995-HOPE (4673) to speak with a HUD-approved housing counselor for free.

www.makinghomeafforable.gov