Ask the Expert: A Q&A with our readersby Tim Manni
Well you do.
HSH.com’s Ask the Expert section gives you the opportunity to write in and have one of our many experts answer your question(s). For over 30 years, HSH.com has been a reliable mortgage source not only for industry experts, but for homeowners and homebuyers as well. Our Ask the Expert section is just the latest avenue for consumers to get professional answers to their mortgage-related questions.
Let’s take a look at a few of our recent questions and answers.
This reader wants to know,” Is it worth shortening my loan term?”
Q: I can shorten the term of my loan by 12 years and lower my interest rate by two percentage points. My monthly payment will rise by $300, and the closing costs will run about $3,000. Is it worth it to refinance?
A: It goes without saying that you’ll save a bundle of interest cost by killing off those 12 years of mortgage payments, and you’ll more than recover your $3,000 over time. However, before you commit to that sizable increase in monthly payment, you’ll want to make sure that other facets of your financial life are well managed. This includes paying off high-rate credit cards, getting life insurance in place, funding retirement and education accounts and more. If that $300 per month can be put to better or more broad use, you may wish to consider a somewhat longer mortgage term, which would put less of a commitment on your cash flow.
This next question comes from a homeowner who is experiencing financial trouble due to a high property tax bill:
Q: The reason I am writing to you is because I received my property taxes today and it is more than $6,000. Coupled with my mortgage cost, I think I will not be able to afford my home this year. Could you guide me about it?
A: Given the decline in property values in many areas of the country, you may wish to consider appealing the tax assessment on your home. Most local tax jurisdictions (usually the county or parish where you live) have formal appeals processes in place. You’ll want to contact your local tax authority to see what you need to do to get the process started. Also, if you are in imminent danger of not being able to make your mortgage payments, you may need to contact your lender to discuss a potential loan modification with them.
Let’s say you have to relocate out of state. Is it best to get your new mortgage here or there?
Q: I am moving to another state and would like to get qualified for a mortgage on a home I will buy in the new state. I will be selling my home in New Jersey.
A: There’s no doubt that relocating to a new state can pose challenges. Depending upon where you’re going, you might be able to find a lender here in New Jersey who also has operations in the new state (or a lender in the new state with operations in New Jersey) giving you a local office to help manage the process. Failing that, you should look to lenders in the new state with outlets near to where you are hoping to move, which will give you access to local resources to help you.
Our Ask the Expert section is located directly on HSH.com (on the right side, under Mortgage News Today).