Hi again donaldsg, I was able to use Dave's post to convince my husband to shop around some more and I'd like some advice on alternatives. Good... but ugghh!! These are the best offers & advice he's secured??? Option 1) Home equity loan from our credit union with a fixed rate of 6.24% for a 10 year term, and costs are mortgage tax only, or Even Bernanke has come out & explicitly stated that the Fed is going to keep short-term interest rates low "well into the foreseeable future." Currently, HELOC money is available around Prime (plus or minus maybe 1/4 to 1/2%) That means you can get the money you need (and only draw it *as* needed) at around a net rate of 3%-ish. That's under *HALF* the costs of the fixed loan, without the more dangerous burden of a forced 10 year repayment amortization*!!! If you anticipate the ability to save up enough money over the future 10 years to pay for this kitchen addition... then you are likely far better off using a HELOC to do the job (which is also exponentially cheaper in closing costs... from jest a few hundred bucks,) and then using your "savings power" to apply your budget to retiring the HELOC balance. (* The reason amortization is a responsible person's nightmare is because it removes budgetary control from YOU. Now, this may actually be a good thing for those who know they are "money-management challenged" and if this is true for you I understand... many people are. HOWEVER, if you are indeed a strong income and budgetary manager, then you are far better off keeping 100% control of which direction you send 100% of your money each month (which you can only do when you are NOT constrained by amortization.) The *BEST* way to eliminate your mortgage (for responsible people,) is to accumulate a side "Mortgage Freedom Account" which grows to the point that you can then stroke out a single large check to extinguish the entire balance at once. EVERYONE ought to eliminate ALL of their home leverage (HOWEVER, never a day nor a dollar earlier than it is SAFE to do so!) Option 2) refinance with our current mortgage carrier for a 20 year term at 4.75%, paying closing costs of $5500 and $1920 for points. Again, going the wrong direction on amortization (I am assuming from your self-description you are indeed a tight and responsible budget manager.) Further, 4.75% is way too pricey on today's market for a 20 year loan. EVEN FURTHER, if you are planning on staying in this home longer than 5-8 years, and you accept a higher interest rate offer in order to have a lower closing cost (which will entirely be financed by the loan anyway,) then you will be tilting the cost/savings trade-off into the present, and casting your permanent costs into your permanent monthly payments which will NOT get reduced back down after the 5 year breakeven period. Put it this way.... For approximately every $1 you spend in higher closing costs which results in a lower interst rate.... You save an annual total of about $0.20 in interest costs, permanently, per year. After 5 years has passed, you CONTINUE to save that $0.20 per year, EVERY year. SPEND $5,000 in discount points, save $1,000 per year on interest charges. After 5 years, KEEP saving $1,000 per year. ALTERNATIVELY; For approximately every $1 you REDUCE in closing costs which results in a HIGHER interst rate.... You SPEND an annual total of an additional $0.20 in interest costs, permanently, per year. After 5 years has passed, you CONTINUE to SPEND that $0.20 per year, EVERY year. AVOID $5,000 in discount points, SPEND $1,000 per year in higher interest charges. After 5 years, KEEP SPENDING $1,000 per year, permanently. Make more sense? This is one of the reasons why it pays to use a properly educated planner to structure your finances, if you aren't familiar with all the variables and how they can really affect you over time. Cheers, Dave Donhoff Leverage Planner

The credit union didn't really "approve" your loan because it has to go through underwriting before it can be cleared to close. Hopefully, that will go smoothly for you and not take too long but the fact is that there has been a rush of refinance apps in the last few weeks. This may slow things down for you. You may not be able to use your old appraisal since, I assume, it was done over 30 days ago. And most lenders have a policy of using existing appraisals only if the appraiser is part of their pool of approved appraisers. Even if the CU agrees to accept it, your former lender will have to agree to sign off on it.

Just because it's an estate sale doesn't mean the piece is old and good quality. It could be the pics, but I'm sure that this is a modern reproduction and it appears to be of a lower quality wood covered with a tinted varnish to get the color rather than be of genuine mahogany that a good quality reproduction would be. I'm thinking 1980's import quality rather than 1960's solid wood repro. If that's the case, then the whole thing would go for around $200 used rather than the 1K of the better quality version. But, if you like it, that's no reason to not buy it. Just for the lower price.

Hi paplock, I assume that you know an approximate price (and that fairly current and precise) that you could receive if you were to sell your home now. And that the mortgage amount owing is for a much lower figure. If the current value of your home is close to the amount owing on the mortgage, (and certainly if it's below it) if I were you, I'd let sleeping dogs lie, leave well enough alone ... ... and hope that the lender doesn't come looking for you. Which they are almost certain to do ... and soon. The banks are running scared in recent times, due to the great losses sustained in those millions of mortgages that were issued for the full appraised value of the home, and at a low current rate on an adjustable one. Sometimes the borrowers understood that their mortgage rate was about, e.g. 2% ... but that the real rate was something like 5%, with the difference being added to the balance owing (i.e. the balance owing was increasing, not being reduced). Sometimes they didn't. Then, when the time for adjustment came, and the real rate was being charged, it resulted in a much increased monthly amount to be paid, which the borrower could not meet, so had to default. It would be wise for him to sell, himself, for if he walks away and the bank has to foreclose and re-sell the home, a number of extra costs are involved, adding to the amount owing. Also, in many areas, the value that can be received on re-sale is much lower, resulting in there being a substantial shortfall between the amount of money received on sale, and the amount owing, and the (former) owner is much more interested in getting as high a resale value as possible than is the bank after foreclosure. In many states, this resulted in the bank sending the former owner who defaulted a bill for the difference ... sometimes in the amount of $20,000., or $35,000., etc. Which made everyone very unhappy. I am a resident of a different country, and those bad mortgage games (which should not have been set up in the first place) have cost me quite a large amount of money, as a Canadian bank in which I've owned shares for 40 years not only had substantial exposure to those sub-prime mortgage loans in the U.S., but the rumour that I have heard is that they guaranteed a company which insured those sub-prime mortgages, which is being forced to come up with the difference between the amounts being received for foreclosed mortgages and the amount owing, now that the prices available have gone down, in some areas something like 20% or so. Those bank shares of mine could have been sold in May 2007 for $107. each, but in the time since have benn slipping, then recovering some, then slipping some more ... ... and in recent times, as several of your large lenders, banks, etc. in the U.S. have been going belly-up, or being taken over (and sometimes with government pressure and incentive) for cents on the recent-dollar value, due to holding far too many of these rotten mortgages ... ... have been much lower. In May 2008, around $76.30 - $69.80 ... in early Aug., $62.25, late Aug. $64.17 ... and now, after your government agreeing to support that market ... by, what ... 750 billion? (in addition to the huge debts being incurred due to the war in Iraq) ... ... $58.50, last Friday, down $3.68 in a week. That's a long way down, from $107. a year ago May. On several hundred shares. So your U.S Dollar and debt woes are having an effect not only within your land, but in other areas, as well. You can see why I'd like to hang some of the practitioners who made such loans up by their toenails ... sorry, that would be "torture", wouldn't it? In addition to which, I bought shares in a Canadian stockbroker, many years ago (I'm almost 80), that later was bought out by U.S-based Merrill Lynch, who issued me (not a large number, thank God) of shares of their company which, almost broke due to those same stinky mortgages ... ... was bought out last week (for peanuts) by Bank of America. Imagine - Merrill Lynch, whose logo for years has been a bull ... going broke?? Each share worth, in spring 2007, over $100.00 ... last winter, over and under $55.00 ... ... now saleable for pennies over $26.00. I, a former regular liberal Protestant clergyperson, so not some highly paid TV evangelist/fundamentalist, am not a wealthy person. Lenders are being far more strict in the criteria that they use regarding loans, now, more so in your land than in mine. I've had a "fully-secured" (by stock certificates and those of mutual funds) line of credit with a bank for a number of years, much of the time lying unused ... at prime interest rate. When I went to see the lender the other day, he says that that line of credit is now an unsecured line, at a higher interest rate, as the only security that their bank allows now is a home or a GIC ... so they will allow no credit at all for my securities ... I may as well pick them up and bring them home. And my question is ... ... if the big shots in his bank, who set the rules in place, think that my stocks and mutual funds are of no value as security ... ... how much value should I place in them? I have shares in only one U.S. company ... ... and I'm not about to buy more ... ... for these huge debts that they're incurring (plus printing money) mean that they'll have to offer higher interest rates in order to entice their foreign lenders to lend to them in future ... ... plus the value of the U.S. Dollar will almost certainly decrease. Unless the current value of your home is a great deal larger than the amount owing ... ... if you start talking refi- these days ... ... you may be disturbing a large nest of potentially angry bees. It'd be a real shame were you to be forced to live in your timeshare for, what - a couple of weeks? a month? per year ... ... and on the boat for the rest of it. Wouldn't it? Just one person's (granted, substantially biased) view. ole joyful