April 2008
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In this Issue:
Price or Interest Rate: Which is More Important?
(Please leave us a comment at the bottom of the newsletter.)
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Price or Interest Rate:
Price is one of the most important considerations in a real estate transaction. But at the same time home buyers too frequently treat interest rates as a secondary concern. Many buyers will stress out over $500 in negotiations over purchase price. But when told that interest rates dropped a quarter or half a point, many home buyers respond with a shrug.
All too frequently home buyers will go with the first mortgage person they meet under the assumption that everyone has roughly the same rates and that a half point isn't really that big of a difference. Let's look at the difference between the mortgage on a 300k and the mortgage on a 295k house assuming a 6.5 percent interest rate.
300k (6.5%) Mortgage $1,896.20 The difference ends up being $31.60 per month.
Now look at the difference between an interest rate of 6.5% and 6.0% on a $300,000 house.
300k (6.5%) Mortgage $1,896.20
The difference ends up being $97.55 a month, or $1,170.60 a year. A simple half point drop lowered the mortgage payment by a whopping 5.4%!
Negotiating the price down on the same property by $5,000 didn't make nearly as big a difference as shopping for the better mortgage.
The moral of this story is, home buyers should still focus on price because it will always be an important part of the real estate transaction. But look at interest rates more closely too, you'll end up with more success in your real estate purchase and lower your mortgage payments.
Don't Get Scammed by Your Mover
The Washington Post reported recently where in one scheme, movers provide a lowball estimate, often asking for an upfront deposit of 25% of the total. Once they move your stuff, they'll ask for much more — four or five times more — and will hold your goods "hostage" if you don't hand over the cash.
In another type of scam, movers will ask for a hefty deposit before moving day — and then never actually arrive to move your things.
To avoid getting scammed, the Post recommends checking out the moving company on the Better Business Bureau's Web site. The article also notes some warning signs: The moving company doesn't come to your home to look at your goods before giving an estimate. They refuse to put anything in writing, ask for a large deposit before moving day or give you an estimate that's much lower than others you've received. The company's Web site lacks licensing information or a local address.
Home Maintenance for April
April
Start your spring cleaning…
Wash your windows, both inside and out. Also scrub the window frames and shutters. Replace storm windows and doors with screens.
Pressure-wash outside surfaces. Spray sidewalks, driveways, exterior siding, decks and fences. Pressure washers can be rented for $50 to $75 a day — split the rental cost with a neighbor. Important: High-powered pressure washers can damage siding and decks if used improperly. Read the unit's operating instructions carefully.
Test your underground lawn sprinkler system. Monitor the system through a full cycle to make sure it survived the winter in good shape. Some sprinkler heads might need to be cleaned or adjusted.
Degrease your barbecue grill with a stiff brush and detergent. Gas grills require disassembly to clean burners. Use a soap solution to check the regulator and hoses for leaks (see your owner's manual).
Clean and check gutters. Remove leaves and other debris from gutters. If you find any cracks or leaky seals, clean the area and use a putty knife to apply a thick coat of butyl rubber caulk. When the caulk dries, flush out your downspouts with a garden hose. If the downspouts don't effectively divert the water away from your foundation, buy splash blocks and place one under each gutter downspout.
Check back next month for your Maintenance Tip for May.
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Home buyers are usually very focused on the purchase price of a property. It should be a concern, but which is more important? The purchase price you pay for the property, or the interest rate of your new mortgage?
You thought buying or selling a home in today's housing market was tricky. But relocating can also be tough, thanks to moving scams.
We continue our monthly update from The Weather Channel's home improvement expert Danny Lipford, that not only reminds you of what needs to be done and when, but also shows you ways to save money. 
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