8 must-ask mortgage and refi questions

Whether you're buying a house or refinancing, there is more to a mortgage than the rate. Here are eight questions to ask while mortgage shopping. You'll have to ask yourself some of these questions; others can only be answered by mortgage professionals and insurers.

1. How long do I plan to stay in the house?
That's often a hard question to answer. Try anyway because a lot of your decisions depend on the answer.

"I always say, 'What's the game plan? How long do you plan to be in the property?'" says Ellen Bitton, CEO of Park Avenue Mortgage Group in New York.

The answer affects whether you would be better off paying points to lower your rate, whether you should get a fixed-rate or adjustable-rate loan, whether you should accept a prepayment penalty. If you're thinking of refinancing, the answer helps you decide whether you should refinance at all.

If you have no idea how long you'll live in the house, keep in mind that homeowners stay in one residence for a median duration of 8.2 years, according to 1998 U.S. Census data. In other words, half of homeowners move within 8.2 years. The other half, naturally, stay in their homes longer. Do you feel "average"? If so, maybe it means you'll stay home for about eight years or so.

(FYI, with renters, the median stay in one residence is 2.1 years.)

2. How much are the costs of getting the loan?
When you apply for a loan, you'll get a federally mandated document called the Good Faith Estimate of Closing Costs. It estimates how much the lender will charge you for origination and discount fees, an appraisal, a credit report, document preparation, title insurance, a pest inspection and myriad other costs. Compare good faith estimates and especially take note of the line that reads "Estimated cash at closing." That's an educated guess of how much you'll have to pay out of your checkbook to get the loan.

3. How long will it take to break even?
If you're buying a home, how long will it take to break even if you pay discount points to get a lower rate? If you're refinancing, how long will it take to recoup the closing costs from your monthly savings?

In either case, all you have to do is divide the upfront cost (of discount points if you're buying a house and of all the closing costs if you're refinancing) by the monthly savings you would get. That tells you how many months it will take to break even. If it's going to take five years to break even but you expect to stay in the house four more years ...

4. What makes me feel comfortable?
Bitton says some of her clients insist on paying zero discount points, while others want to pay a lot of points to get absolutely the lowest interest rate, "even if it takes four or five years to break even."

As far as Bitton is concerned, there often is no right or wrong answer when people ask whether they should pay discount points or choose a 15-year or 30-year mortgage. "There's not just an objective, dollars-and-cents number," Bitton says. "There's also the psychological factor. What are you going to feel comfortable with?"

She has clients in their 70s and 80s who get 30-year mortgages because that's what makes them feel comfortable. Some homeowners would rather refinance once and never have to bother with refinancing again, so they pay a lot of points for a rock-bottom rate. As a bonus, they have something to boast about at cocktail parties. Other clients simply want the lowest possible payments, so they snag an interest-only, five-year ARM. All understand what they're getting into and have found their comfort zones.

Article continued at http://www.bankrate.com/brm/news/
mortgages/20021003a.asp?page=default

Home Improvement

#1 Electronics Store - Looking for discount Electronics and Computer Products? #1 Electronics Store has a great selection of discount electronics and computer products at some of the best prices around!

2Hulls - 2Hulls has 100s of pages and 1000s of images dedicated to the catamaran and trimaran multihull afficionado. Buying, selling, chartering, fixing or refitting, experts - it's all there!

As Seen On TV Merchandise - As Seen on TV Store featuring merchandise from the TV infomercials. Products such as blublocker sunglasses, ginsu knives, health and beauty, housewares, toys, tools and much more at discounted prices.

Blinds Express - Featuring Hunter Douglas, Levolor, Comfortex,and Kirsch. All major Brands are sold here! Custom window treatments.

Cabinet Hardware Direct - High quality cabinet knobs and pulls, in solid brass, lead crystal, wrought steel, porcelain, bronze, pewter, and more.

Island Christmas Shop - Spend Christmas in the Caribbean! Unique island ornaments, nautical holiday decorations and tropical Christmas greeting cards. Come see how Santa delivers to the islands!

Island Wedding Shop - Beach theme wedding favors, table centerpieces, and decorations with island attitude. Great ideas for your reception, bridal shower, engagement party or corporate event. We'll bring paradise to you!

Nautical Supply Shop - Authentic and decorative nautical home accents and fixtures. Perfect executive gift items for for your favorite old salty dog or pretty young mermaid. Sail on over!

Residential Landscape Lighting & Design! - We specialize in sales of low voltage, outdoor lighting fixtures, recessed, art, under cabinet, home lighting, Lutron Dimmers, Barbeque Lights, Tennis Court Lighting & more!

Seashell World - An environmentally educational shopping experience. Exotic sea shells, starfish, sand dollars and unique seashell novelty items. Fun for collectors and crafters alike. Dive on in!

Futon Furniture - Ellens Futon is one of the largest discounter of futon furniture in the Washington area. Our huge selection and warehousing capability allows you to order product and have it in your home in the shortest days you can ever get...

Kitchens - Bella Cucina Kitchens are one of the experts of designer Kitchens in UK.

Futon Cover Store - FUTON COVERS USA is one of the largest discounters of futon covers manufactured in the USA.

Bedroom Decorating Ideas - House decoration ideas and advise for all sizes and shapes of rooms such as: bedrooms, offices, dorm rooms, and apartments.

Conservatories Installation - Specialists in UK in the replacement of windows and the design and construction of bespoke conservatories, the forte being to match existing properties, whether 'making a statement' for a modern futuristic design or blending in with an original Tudor building.

Home Insurance Quotes - Quote For Insurance offers free online home insurance quotes for homeowners or renters insurance policies that fit your needs, lifestyle, and budget.