Q & A with Dottie Herman

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Q1 - Is it true that if my wife and I make an extra mortgage payment each year on our home we can decrease the life of our loan? Does it really make that much of a difference if we pay 1 extra time each year? How do we even go about that?

A - Yes it is true. In fact on a new 30 year mortgage, if you make 1 extra payment per year, you will pay off this loan in 22 years. This can be accomplished several ways;

• One extra payment per year

• Taking that one extra payment and breaking it down over 12 months or any combination that will equal this total.

• Setting up a biweekly auto payment which will take your monthly payament, divide it in half and base on how our annual calendar works you wind up make 26 half payments which will equal 13 full payments there by accomplishing the same.

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Q2 - The home my wife and I were trying to buy didn't work out because we weren't able to get a mortgage--the seller has already fixed some of the problems that the engineer found, however, since we can't go through with the transaction can we be held responsible for the improvements they just made?

A - On a standard contract of sale unless specifically indicated in the body or rider of the contract, if you were unable to acquire a mortgage commitment and you property applied for it, you should have no obligation to the seller what so ever. In fact a standard mortgage contingency clause will allow you to get your down payment back.

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Q3 - What is the difference between a refinance and a loan modification?

A - A refinance is a re qualification for a new loan. This will require that you income and credit qualify for the loan. In addition your property must appraise for the loan to value that each bank requires. This loan would also typically have closing costs associated with it.

A modification is where a bank agrees to restructure your loan even if you don't qualify under the current loan guidelines. This sometimes is done with little or no closing costs. Please note that modifications are not always granted to everyone who requests them. It usually is for those who are falling behind and are at risk of going into default.

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Q4 - What are some things I can do to my house before an open house? Should I remove my pictures? I read somewhere that people shouldn't know who lives in the home but rather picture themselves there. Does that matter?

A - If you aren't comfortable having your pictures up you can take them down.  I believe that is more of a personal preference than a necessity.  But there are definitely some things you can do to help make your home as attractive as possible. This includes the removal of clutter, making sure your home is clean, and keep it free of odors.  Your furniture should also be arranged in a way as to not block the flow of a buyer who walks through it for the first time.

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Q5 - I have small children and I am trying to sell my house to move to a larger home. Unfortunately lots of people want to see the house at night, but because I have small children we have to turn down a few showings, will this hurt my chances to sell? Should I stay someplace else for a few weeks with my family?

A - Work with your agent to create a schedule of showing times.  Most buyers, when told of the reason why night time showings don't work, will find a way to acquiesce.  By having a set schedule of when it's ok to show your home, that buyer can in advance clear his or her schedule so they can view it.  It sounds like moving someplace else would be an imposition on your family.  The good news is that it can be avoided.  Try setting up a schedule of showing times that should help.  

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If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com.
 
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best.

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