That’s the news from the New York Times a few days ago. ““People have literally picked up their house at the foundations and shook it upside down like a piggy bank,” said Ed Smith, chief executive of the Plaza Financial Group, a mortgage brokerage firm in La Mesa, Calif., near San Diego.” According to NYT’s November 3 article, many people, during the housing bubble, and continuing, have not only taken out loans on the equity in their homes, and spent that money, but also negotiated lower house payments, and spent that money, as well. Now, I understand that investing your home equity can be a good way to grow your wealth. But to squander it…it’s unimaginable to me, that people would borrow against their homes and blow the money, as if it came from the sky. But according to the Times of New York, that’s exactly what’s been happening. Fortunately, I wasn’t in the position to make a decision like that, but I hope I would have made the right decision.

Refinancing is becoming a hot topic these days with the rising interest rates, sluggish housing markets and increased number of foreclosures.  If you’re thinking about a refinance, here’s a few things to consider:

-Why do it?  Well for a couple of reasons.  You may have a variable interest rate loan and be concerned that your rate will raise your payments higher than you can afford to make.  Another reason would be to use the home equity to pay off outstanding debts like credit cards or student loans.

-Is it worth it?  Well, if you plan on moving out of your home in the next year or two, probably not.  You’re more likely to lose money in those instances.  But if you’re planning on lengthy stay, the money you’ll save will compensate for any closing costs.

-Shop around for rates.  Check with different banks and lenders, asking about their rates and terms.  Also ask your current lender about their rates and terms.  They already have business with you and would like to keep it, so they are very likely to offer you favorable terms, especially if you let them know you’re shopping elsewhere too.  Sneaky, but effective.  With the housing markets slowing down, competition for new loans is keen and the lenders know it.

Most important for you to know is that nothing is final until you sign on the dotted line.  Do your research and make an informed decision.

It never fails.  Almost before you can put the key into the door of your new home, you get bombarded with offers of mortgage life insurance to pay off your debt should you meet an untimely demise.

Treat those offers like telemarketers or other junk mail.  Dispose of it immediately.

Most of those policies are exceptionally overpriced and they decrease in worth as you pay off your mortgage.  Certainly not worth the money you pay out, but insurance brokers know how to prey on the fears of the worst to sell you on these plans.

Instead of mortgage life insurance, your better option is to take out a regular life insurance policy that will not only meet the costs of your obligations, but allow your grieving family an income to live on while they cope with their loss.

Weighing your debt basically consists of figuring out what the average rate is you are paying.  This works great if you have a primary mortgage plus a HELOC (Home Equity Line of Credit) or a secondary mortgage. 

The first step is to add up your debt.  For example, you have a $200,000 primary mortgage at 5.875% and a HELOC with a balance of $100,000 with a rate of 7.25%.  Your total debt is $300,000.

The next step is to divide your primary mortgage of $200,000 by your total debt of $300,000.  This will produce .67, which you will then multiply by your primary mortgage rate of 5.875% which equals 3.94%.

The third step is to do the same process with your HELOC.  Divide $100,000 by $300,000 which will produce .33.  Multiply .33 by 7.25 and you get 2.39%.

Now, you will add  2.39 plus 3.94 and you get 6.33.  So, you are paying an average of 6.33% on both mortgages.

With the rise in interest rates, foreclosures are estimated to reach some 500,000 this year.  Money might be somewhat time, so now’s the time to act not later.  Avoid becoming a statistic.  Take what action you can to avoid the F word.  If you’re struggling to pay your mortgage, call your lender and ask for suggestions how you can preserve your home and still satisfy your obligations.  Take a good look at your bills; if there’s anything you can trim back, do so.  Honestly assess your outflow versus your income and decide if you may need to sell and downsize.  The trick here is to act early before the deluge of phone calls asking for payments strikes, or worse, foreclosure on your loan.  With a touch of preventative action, it can be avoided.

Can having a dog or cat (or any other pet) reduce the resale value of your home?  Well, first of all, let’s look at how many Americans actually own pets.  The American Pets Products Manufacterer’s Association says that 43 million households have dogs while almost 38 million households have cats.  That said, it’s very likely that the people who will be looking to buy your  house will be pet owners themselves as will other properties for sale at the same time as your home is for sale.  So, if you decide to get a pet, you won’t be alone!

That’s not to say you shouldn’t take certain precautions, though.  If you have a pet in your home, there are things you’ll want to do before putting your house on the market and before each showing of your home:

-Make sure you keep the house clean of pet hair.  Have the carpets and furniture professionally cleaned before putting your house on the market and dust and vacuum frequently.

-Repair any pet-related damage such as chewed on cabinets or stained carpet.

-Keep the animal out of the house during showings.  Whether you take the pet with your or put the pet in a kennel, you don’t want potential homebuyers being surprised by seeing an animal in your house.

As long as your house is in good condition and clean, the presence of a pet shouldn’t affect the value of your home.

When you’re buying a home, you should never skip the home inspection.  It will tell you if there are any concerns in terms of safety, maintenance or code that you’ll want to be aware of before you move in and a good home inspection will also let you know if there is anything that needs to be fixed by the seller before completing the deal.  

The question is, however, who all should be there?  Of course, you’ll want to be there because the home inspector will likely give you very useful information during the process.  Your real estate agent will also want to be there because he or she has experience in these things and will know which things you can let go and which things you’ll want to take to the seller to get fixed before closing.

Sometimes the seller likes to be at the home inspection as well.  There are pros and cons to this.  Often times, an inspector likes to have the home seller there during the inspection for many reasons:

-The inspector can ask the seller about certain things (such as water stains) to find out if it’s a constant problem or the results of a one time incident.

-The seller can tell you where to find things, especially in older homes, such as the outdoor spicket turn-off, addtional breakers, etc. 

-Sometimes there are things the inspector would like to check out but can’t because it’s covered, locked or otherwise inaccessible.  Having the seller there is useful because they can move the stuff, unlock the doors or just generally give consent to get into these hard to reach areas. 

-Finally, the seller’s presence can be beneficial to the home buyers because the seller can give them hints on how to “run” certain things in the home during the walk-through — especially if the house has special features such as an intercom or surround sound system.

There are cons to having the seller present as well.  Having your home inspected can be difficult when the inpsector is telling you everything that is wrong with your home and the sellers can get defensive about what the inspector is saying.  The seller can also try to “blow off” certain things that might end up to be a big deal in the near future such as a leaky pipe or some shingles lifting off of the roof.  Finally, the buyers may feel like they cannot be candid when discussing the home’s “issues” when the seller is standing right there.

Chase is expanding their interactive eSummit online training program to broker and correspondent home equity customers.  The eSummit holds presentations to help participants learn more about the products and features that are offered by Chase.  You are able to ask Chase experts questions online and receive live answers instantly.  The eSummits are held bi-monthly and allow Chase customers to learn of new and exciting news and new products from Chase.  

Chase is one of the leading home equity lenders in the United States.  They have generated more than $54 billion of home equity originations.  Chase works through banks, brokers, correspondents and mortgage offices.  The eSummits are available to customers on the Chase website under the Home Equity section.  

You’ve got your loan, you’re buying your house, and now comes the tricky question: how do I want to handle my house insurance?

If you have a mortgage, home insurance is not an option.  Even if your house is paid off, you still want to keep your insurance.  But there’s a fine line between making sure there’s enough coverage to replace your house without paying high premiums for that coverage.  Here’s a few tips.

*Have a higher deductible.  This will lower your payments and save you money in the long run.

*Keep all your insurance in one place.  Have car insurance?  You’ll get a discount for keeping your insurance business with one agent.  Same goes for life insurance.

*Keep an inventory of your house’s contents, especially for big ticket items.  This includes any jewelry, furs or expensive electronics you possess.

*Make sure you insure those big ticket items.  Sure you want to replace the house, but you’ll want to replace the furnishings also.  Floors get mighty hard and cold at night.

*Make sure you let your agent know if you do anything to increase the value of your house, like a remodeling job, adding a pool or tacking on another room.

*Shop around.  You put a lot of time and energy into picking the house.  Give the insurance the same diligent consideration!

Now that the insurance is settled, time to sign the contracts and handle the big task.  Moving in.

You’ve decided to make the move from renting to owning and you’ve shopped around to find that “perfect” house for you.  Here are some tips to keep in mind before you sign the dotted line on that offer to purchase:

1. Make sure that you truly can afford the house.  Even if your bank has pre-approved you for a loan, you’ll need to make sure that you can afford the payments and the escrow for the property taxes based on your other monthly expenses.  You don’t want to be strapped into a payment that tightens your budget too much.

2. Don’t forget the home inspection contingency.  Especially if this is your first home, you’ll want to have a home inspection by a liscensed home inspector.  A good home inspection will walk you through the house, point out possible future problem areas as well as point out absolute problem areas.  Some home inspectors will even give you tips on how to “run” your new home.

3. Research the neighborhood and community.  Before you make that move, you want to make sure that you like the neighborhood.  Talk to people who live there, ask questions.  If you have kids or plan on having kids, research the schools and community activities that are important to you.

By making sure you cover your bases, your home purchase as well as your life in your new home will go more smoothly.