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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:
- the new mortgage rate should generally
be 2 to 3 points lower than the homeowner's existing mortgage
rate
- 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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|
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.:
- Schedule your interruptions.
Let people know you
are available for visitors and phone calls during certain
hours - and that time only.
- Let co-workers know at the
start how much time
you can spare. This encourages concise speaking and focusing
on relevant information.
- Tell the visitor that you
are working on an important project with an imminent deadline.
"I have to complete this project by noon."
- Convey urgency. Standing
when anyone enters your office signals the conversation
should be short, and it keeps the visitor from sitting.
- 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.
- Make your work place less
friendly. Stack books, boxes, or heavy equipment on the
chairs.
- 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."
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| Questioning
the Customer
Management consultant William
Bridges recommends asking these questions to serve your
customers better:
Bridges also recommends asking
non-customers why they are not customers, and asking existing
customers why they remain loyal.
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Return to Table
Of Contents
|
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.
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|
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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Return
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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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Of Contents
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The ABA
Spirit is published by:
American
Benefits Association
For information
regarding your membership and
association benefits, call or write:
Membership Services Office
American Benefits Association
16476 Chesterfield Airport Rd
2nd Floor
Chesterfield, MO 63017
1-800-992-8044
or (636) 530-7200
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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