Save That Energy

It's an old kitchen-table debate: Does it cost more to turn the lights off when you walk out of the room than it does to leave them on? The answer is worth considering because many homes today have more — and more varied — electronic gadgets. Wasted electricity can really add up.

It is smart to turn off lights when you're not using them. Incandescent bulbs, the cheapest but least efficient kind, do last longer if they're left on but burn through enough electricity to make it worth flipping the switch. With fluorescents, especially the bulky institutional tubes, you'll save less but turning them off won't cost you anything.

Switch to bulbs with a lower wattage where you can. Halogen bulbs are more efficient than traditional incandescent ones and compact fluorescent bulbs cost 10 to 20 times more but last 10 to 15 times as long and use far less energy.

Many electronic appliances — DVD players, stereos, video-game consoles — draw power even when off. You can cut down on the draining of "idle" energy by hooking your appliances to a power strip and flipping the power switch on the strip when you turn your gizmos off. There are even "smart" power strips that cut the power automatically.

You may be tempted to leave you computer on since most now come with a sleep mode. But even in sleep mode, your computer will use 30% of the energy it uses when active.

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Ready To Consolidate That Debt?

If you're a homeowner saddled with debt (and we're talking about bad, high-interest debt like the kind you pile up on credit cards) then Alan Greenspan has offered you an escape route. How so? Well, while credit-card interest rates have become increasingly immune to Fed rate cuts (with the average fixed-rate credit card now charging 13.5%), home-equity lines of credit, or HELOCs, have fallen below 4.0%. That's one of the lowest rates we've seen since these products first became popular back in the mid-1980s. And better yet, that rate is before you consider the tax break on your interest payments. Indeed, from a pure number-crunching perspective, consolidating high-interest, nondeductible debt into a HELOC or a home-equity loan, or HEL, is a no-brainer. Of course, your home is the collateral for such a loan, and foreclosure could leave you bunking down in Mom's den.

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A Retirement Quiz For Boomers

Despite the approach of the 60th birthdays for its oldest members, many baby boomers admit that they haven't decided on an age to retire, nor have they actively planned how much they should save each month to achieve retirement goals.

So, how are you faring? Answer these 10 questions to find out if you're ready to retire:

1} Have you and your spouse discussed retirement plans and goals?
2} Do you know what retirement savings options are available?
3} Have you and your spouse decided on an age to retire?
4} Do you monitor your savings and investments with your retirement age in mind?
5} Have you estimated what your retirement income will be from Social Security, your employer-sponsored retirement plan and other savings?
6} Do you continue to search for savings options to help you save more for retirement?
7} Have you estimated how much you will spend each year during retirement?
8} Do you have a plan to automatically divert money from your paycheck or bank account into retirement savings?
9} Have you prepared an emergency fund or otherwise financially prepared for unexpected life events such as illness or unemployment?
10} Do you periodically review your insurance coverage to ensure you are adequately covered?

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Loan Process Explained

Pre-Qualification
Pre-qualification occurs before the loan process actually begins, and is usually the first step after initial contact is made. The lender gathers information about the income and debts of the borrower and makes a financial determination about how much house the borrower may be able to afford. Different loan programs may lead to different values, depending on whether you are qualified for them, so be sure to get a pre-qualification for each type of program you are suited for.

Application
The application is actually the beginning of the loan process and usually occurs between days one and five of the loan. The buyer, now referred to as a "borrower", completes a mortgage application with the loan officer and supplies all of the required documentation for processing. Various fees and down payments are discussed at this time and the borrower will receive a Good Faith Estimate (GFE) and a Truth-In-Lending statement (TIL) within three days that itemizes the rates and associated costs for obtaining the loan.

Processing
Processing occurs between days 5 and 20 of the loan. The "processor" reviews the credit reports and verifies the borrower's debts and payment histories as the VODs and VOEs are returned. If there are unacceptable late payments, collections for judgment, etc., a written explanation is required from the borrower. The processor also reviews the appraisal and survey and checks for property issues that may require further discernment. The processor's job is to put together an entire package that may be underwritten by the lender.

Underwriting
Lender underwriting occurs between days 21 and 30 or sooner. The underwriter is responsible for determining whether the combined package passed over by the processor is deemed as an acceptable loan. If more information is needed, the loan is put into "suspense" and the borrower is contacted to supply more documentation.

Mortgage Insurance
Mortgage insurance underwriting occurs when the borrower has less than 20% of the loan amount to put towards a down payment. At this time, the loan is submitted to a private mortgage guaranty insurer, who provides extra insurance to the lender in case of default. As above, if more information is needed the loan goes into suspense. Otherwise it is usually returned back to the mortgage company within 48 hours. (There are some programs where no PMI is required when financing more than 80%.)

Pre-Closing
Pre-Closing occurs between days 25 and 30. During this time the title insurance is ordered, all approval contingencies, if any, are met, and a closing time is scheduled for the loan.

Closing
Closing usually occurs between days 25 and 45 of the loan (depending upon the designated length of your escrow). At the closing, the lender "funds" the loan with a cashier's check, draft or wire to the selling party in exchange for the title to the property. This is the point at which the borrower finishes the loan process and actually completes the transaction.

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Foreclosure Forecast

Brokers and Agents should take a good look at the foreclosure marketplace for several reasons, not the least of which is to broaden the range of services they offer and enjoy increased sales.

Consumers are fascinated with the concept of saving money on their home purchase. That's why they seek information about foreclosed properties. The perception is that they will save money. This isn't always true. Not all foreclosures are deals. Regardless, the same consumer has expressed an interest, need or desire to purchase a property, and whether they buy a foreclosed home or not, they still need to purchase a property. This creates several opportunities for the wise broker/agent.

The plain truth is that most foreclosed homes are now sold by brokers/agents representing the lending institution that foreclosed the mortgage or trust deed. Why is this? Over the years, lenders have learned that the regular distribution channel for real estate sales is still the best. In other words, selling their foreclosed property inventory through brokers/agents is the fastest, most economical way for lenders to dispose of these properties.

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