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When To Refinance Your Mortgage

If you're a homeowner, chances are you've heard about the wealth of riches to be made from refinancing your home. Last year, single-digit interest rates made it possible for homeowners to slash their monthly bills in half and own their homes in half the time, allowing them to go out and buy furs and Cadillacs and everything else they've ever wanted. ..right?

Well, not exactly. Refinancing can reduce mortgage costs, in some cases dramatically, but careful planning and a close look at all the costs involved are necessary for prospective refinancers. Spectacular ads have attracted thousands and misled many. Savings aren't always as much as advertised, and hidden costs can take an unwary consumer by surprise.

Demand Is High
In recent years, the mortgage industry has been inundated by the new rush of refinancing. Some estimates put three out of every four new loans going toward refinancing old mortgagees.

If rates continue to remain low, refinancing will continue to attract more homeowners. And even as interest rates be- gin to nudge up a bit, analysts expect that this will cause people who have been cautious or just procrastinating to hurry up and get in on the refinancing train before interest rates turn up.

Points To Consider
The main problems of refinancing lie in the sometimes not- so-obvious charges and fees. Refinancing costs money. Financial institutions incur administrative costs for refinancing, such as document filing, loan committees, and employee labor, so they charge homeowners "points."

A "point" is one percent of the total loan proceeds, say, $1,000 on a $100,000 loan. Points can either be paid up front, or can be incorporated into the loan itself, so the loan would be $101,000 instead of$100,000.

In some states, there are mortgage registration taxes. Title search, title insurance, a credit report, inspections, surveys and appraisals all must be dealt with and paid for when refinancing. These costs, excluding the points, can run into several hundred or even thousands of dollars.

In addition, once a mortgage is refinanced, the tax savings are often less. And most refinancing costs are not deductible.

When Refinancing Makes Sense
All of this aside, refinancing does make sense for many homeowners. If you're considering refinancing, there are a couple of things you should keep in mind. Consider not

only what your interest rate is now, but also the kind of mortgage you currently hold. Calculate the length of the new mortgage, the points and fees you will be charged, and how much interest you will save.

Basically, your decision should be based on the up-front costs of refinancing versus the higher interest rates on your old loan.

Also realize that these costs vary from source to source. It pays to shop around on refinancing charges and points. Although some financial institutions are raising charges to deal with the refinancing traffic, many still offer good deals.

Many experts set forth the following considerations for people who are thinking of refinancing their mortgage:

  1. the new mortgage rate should generally be 2 to 3 points lower than the homeowner's existing mortgage rate
  2. the refinancing, points, and closing costs should be recoverable through the lower mortgage payments and tax benefits.

Some homeowners refinance their mortgages and then, budget allowing, keep paying the same monthly amount that they have been on their old loan. They do not save money this way in the short-term, but they own their houses much sooner, and save tremendous amounts of money in interest charges and from having their home paid off years sooner.

The bottom line is this: before you refinance, conduct a thorough review of your finances with your financial planner and accountant.

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eGroupManager Offers Great New Deals To ABA Members

As an association member and user of eGroupManager.com, you can now take advantage of some valuable new online services. These services will be offered to you at special discounted member rates! Our affiliation with eGroupManager.com will allow other, similar benefits to be offered to you in the future.

An online newsletter, containing updates on member benefits, will be e-mailed to you each month. To sign up for the online newsletter, simply send an e-mail to eGroupManager at: support@eGroupManager.com. They'll need to know the e-mail address at which you want to receive your newsletter.

Here are some of the new benefits available to you at www.eGroupManager.com and at www.HopTheShops.com:

ShareBuilder
This is a highly reputable online brokerage service that allows you to make investments completely online. With ShareBuilder, you build your portfolio over time buy making automatic, dollar-based investments in the companies you choose. Transactions cost just $3 with no minimum investment amount. Get started today at http://egroupmanager.sharebuilder.com.

NHS Info
An online health assessment company, NHS Info offers helpful reports, surveys and health tips for individuals and for companies of any size. Fill in their online survey and find out how your health stacks up against that of other people in your age category. As an association member, you save $8 off the regular cost of a health assessment: you pay only $9.95 per assessment.

Here's How To Get The Deals
You can take advantage of these important online services in two easy ways:

  1. Access your association through www.eGroupManager.com; or

  2. Visit www.HopTheShops.com and register as a preferred member (Association members only) to access the "members only" area of the site. Once in the store of your choice, just point and click your way to these great deals.

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Business Boosters

Computer Tip

Magnets belong on the fridge, not on the computer. A magnet on a computer case can cause it to malfunction because many hard drives and floppy disks store data magnetically. A magnet could erase or rearrange the data, making it impossible to read.

 
Not Now!

If interruptions on the job are driving you crazy, try some of these tips from Steve Kaye of Personal Quality, Inc.:

  1. Schedule your interruptions. Let people know you are available for visitors and phone calls during certain hours - and that time only.
  2. Let co-workers know at the start how much time you can spare. This encourages concise speaking and focusing on relevant information.
  3. Tell the visitor that you are working on an important project with an imminent deadline. "I have to complete this project by noon."
  4. Convey urgency. Standing when anyone enters your office signals the conversation should be short, and it keeps the visitor from sitting.
  5. Create physical barriers. Make it difficult for wandering time-wasters to stop by. Close your door. Or if you work in an open space, position your work space so it faces away from the entrance.
  6. Make your work place less friendly. Stack books, boxes, or heavy equipment on the chairs.
  7. Be honest. If someone asks you, "Got a minute?" or "Is this a good time?" just say no.
A Little Goes a Long Way

Wearing perfume and cologne, particularly musks, is not appropriate in the work force," says Sandra Morissette, an etiquette consult- ant in New York, N. Y. "There are too many romantic and sexual overtones to wearing scents, and it's distracting at work."

In addition, Morissette points out that many people are allergic to chemicals used in scents, especially less expensive varieties. The syrnptoms they develop include difficulty breathing, headaches, sinus irritations, and - in extreme cases - hives. Even people who wear a small amount of perfume can compound the effect by using other scented products, such as hair spray, lotions, and laundry detergent.

"If you insist on wearing a fragrance at work, choose something on the more expensive side and change it frequently because if you wear it every day, you lose your ability to smell it and wind up adding more and more," she says. "Also, never apply perfume or cologne in public - it's better to do that in the restroom."

Questioning the Customer

Management consultant William Bridges recommends asking these questions to serve your customers better:

  • Do my company's products and services solve your problems or meet your needs ?

  • How can I provide better services or products for you?
  • What are the company's best and worst products and services?

Bridges also recommends asking non-customers why they are not customers, and asking existing customers why they remain loyal.

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Health

Good Morning Stretch

If the dark mornings at the start of Daylight Savings Time make it harder to get out of bed, try this yoga move to wake up and get moving, suggested by Lorin Roche, Ph.D.

  • Sit up in bed.
  • Close your eyes
  • Stretch by raising your arms up over your head for a full minute, inhaling and holding each breath for 10 seconds.
  • Twist from side to side.

Still sleepy? Get out of bed, stand, and repeat the process.

Help Your Child Breathe Easy

According to the American Academy of Pediatrics, one in ten children suffers from asthma. You can learn to spot an asthma attack by watching for one or more of these tell-tale signs:

  • Difficulty in breathing
  • Breathing faster than usual
  • Complaints of wheezing, coughing, shortness of breath, or tightness in the throat.
  • You can help your child avoid attacks by avoiding such asthma triggers as:
  • Infections in the trachea or the ear, nose, or throat
  • Cigarette smoke
  • Air pollution
  • Particularly cold or dry air
  • Allergens, such as pollens or dust mites.

 

Tame that Twitch

If your eyelids are blinking more than normal, opthalmologists say that your eyes are proba bly re-moistening the cornea, which dries as a result of too much reading, irritation from contact lenses, or a lack of sleep. To combat the dryness, get more sleep and close your eyes from time to time while reading. If the problem persists (and you don't think contacts are to blame), ask your eye doctor to recommend eye drops.

Easing the Pain of Canker Sores

Canker sores -small, white ulcers inside the mouth -are typically brought on by stress or smoking. It's possible to ease the discomfort by sucking on ice or dabbing the sore with milk of magnesia or an over-the- counter ointment with benzocaine. They usually go away within a week to 10 days, but see your doctor if they last longer than two weeks.

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Personal Finance

Clean Out Your Closets-
and Get a  Deduction Besides

The Philanthropic Advisory Service (PAS) of the Council of Better Business Bureaus reminds us that you can get a tax deduction on clothes donated to charity. To assess their value for tax purposes, it recommends pricing comparable items at a thrift store. Most stores run by charities let you estimate the amount of your donation and give you a receipt for your records.

If you estimate that you are donating a tidy amount - say, several hundred dollars' worth - you are advised to price each item and get the total figure notarized. The PAS notes that you cannot deduct clothes given to consignment stores where you are given a percentage of the final sales price.

Buying the Right Sneaker

The Athletic Footwear Association of North Palm Beach, Fla., recommends matching the sneakers you buy to your exercise routine:

Runners and walkers - Choose low cut sneakers with wide soles at the toe for balance.

Aerobic exercisers - Opt for sneakers with narrow soles to allow quick, easy pivots and turns. Also, look for extra cushioning to soften high-impact jumps.

If you do a bit of all three, your best bet is cross-training sneakers, which offer extra support and deep grooves to avoid slipping.

Costs Vs. Resale Benefits of Remodeling

Remodeling Magazine compiled the chart below to show the national averages of costs of 10 common home improvements and the returns these "investments" will yield on the sale of a house. You may still want to enjoy the improvement, but you will at least have an idea of what it will cost if you go ahead.

Home Improvement Cost Percentage Recouped 
#1 Minor kitchen remodeling $ 8,379 102 percent
#2 Bathroom addition $11,721 92 percent
#3 Major kitchen remodeling $22,509 90 percent
#4 Master suite addition $37,388 87 percent
#5 Two-story addition $56,189 87 percent
#6 Attic bedroom $23,002 86 percent
#7 Family room addition $32,558 86 percent
#8 Bathroom remodeling $ 8,563 77 percent
#9 Deck addition $ 5,927 73 percent
#10 Replacement of siding $ 5,099 71 percent

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Articles in this newsletter are meant to be informative, enlightening, and helpful to you. While all the information contained herein is meant to be completely factual, it is always subject to change. Please consult your attorney or accountant before making any financial decisions.

   
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