Q & A with Dottie Herman

---

Q1 - I am thinking of refinancing. I want to know if there is an advantage to switching from a fixed rate to an adjustable mortgage?

A - The reasons to pursue a refinance are to lower your payment, lower the term of your mortgage, and/or access cash form the equity in your home.  The fixed rate mortgage is usually the best option as it is more secure and not subject to fluctuation in rate or payment.  The reasons that you might consider an adjustable rate mortgage are if you are only planning to remain in the home for a short period of time, in that case you would benefit from the short-term interest rates and not be subject to increases over the longer period. The other reason has to do with the features of the loans. If you plan to pay down the mortgage faster over time then consider how this impacts your decision.   When making a partial payment to a fixed rate loan the balance and term of the loan is reduced but the payment remains the same.  With an adjustable rate mortgage it is possible to have the payment recalculated at the time the loan is due for an adjustment, resulting in a lower payment.  Consult with a mortgage lending professional to learn more about the options available.

---

Q2 - I am thinking about paying off my children's mortgage on their home so they can live more freely without having to worry about the payments. What would my tax obligations be? 
 
A - This question is specific to your finances and is best answered by your tax adviser.  That said there are two things that you should ask.  First consideration is: who gets the deduction on the mortgage interest?  If the payment of your children's mortgage is considered a gift to them it will have tax implications for you or them.  These can be significant issues so do some homework before you proceed.

---

Q3 - I recently put my home on the market and I actually got an offer in about 2 ½ weeks. The offer was a bit low so we countered and finally accepted their offer, even though it was lower than we had hoped. That evening we accepted, they called to say they are unsure. Now we do not know what to do from  here? We are very eager to sell. Should we reduce the price more, or give them a few days to contemplate the purchase?

A - This may just be a case of "Buyer's Remorse." You need to find out more information before you try to salvage the deal. Did this buyer have a mortgage in place or are they experiencing qualifying difficulties?  Were there contingencies that may have caused uncertainty? While you are fact-finding to answer these and other questions, it is recommended that you continue to market your home for sale. From what you've shared, your price did attract a buyer quickly and still left room for you to negotiate. You might want to consider working with a real estate professional who can provide you with the data and the marketing expertise to give you a more accurate read of your area. Spring is an excellent time to sell your home and you may not want to lose opportunities by focusing solely on a shaky buyer.

---

Q4 - Is there a room that buyers care most about when purchasing a home?

A - No two buyers are alike....most buyers today are interested in finding homes that will provide the lifestyle experience that fulfills their needs. With the emphasis on cooking and entertaining at home, kitchens can be an important focal point and as is the flow to entertaining space.  Growing families tend to focus on bedrooms, storage and outdoor space. When marketing your home, emphasize your home's best features and do your best to make your home "show ready." Flowers, de-cluttering and fresh paint combine to make a home have more curb-appeal.

---

If you have a real estate question for Dottie, please send it to; Reporters@WorldPropertyChannel.com

---