POSITIONING YOUR HOME FOR SALE

Statistically, if we were to ask what your mortgage rate is today, most of you would be in the 5.75% to 6.5% range. Now, if we asked you how much longer you intend to be in your home, and you answered 3-to-5 years or longer (to "ride out" the current down market), our response would be to look at refinancing with an FHA loan. Now.

For one thing, interest rates are still phenomenal - hovering around 5%. Over the next few years, inflation will return and rates will undoubtedly rise. Perhaps even more importantly, especially if you expect to sell in the next few years, is that FHA loans are fully assumable! How's that for having a great selling point, when compared to other homes you'll be in competition with?

Now, if you're already reaping the advantages of an existing but higher rate FHA loan, you have the option of refinancing by doing a "streamlined" FHA, which reduces the rate to the current neighborhood of 5 percent (or less). Streamline refers only to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. But closing costs are minimal and out-of-pocket costs can be zero. The basic requirements of a streamline refinance are:

- The mortgage to be refinanced must already be FHA insured.

- The mortgage to be refinanced should be current (not delinquent).

- The refinance results in lowering the borrower's monthly principal and interest payments.

Also, no cash may be taken out on mortgages refinanced using the streamline refinance process.

However, if you do refinance at a lower rate and can still swing it, keep your monthly payment the same. Doing so can literally knock years off the term of your mortgage and has the potential to save you hundreds of thousands of dollars on your loan. Slick, huh?

Now, take action. -L&M