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posted: 11/9/2013 12:30 AM

Costs of refinancing help determine if it is a wise move

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Q. I agree that it is a good idea to refinance. But I think you left out a couple of things in your response. The costs of refinancing, in a recent letter I got, were over $4,000. Besides, at the beginning of a new loan payments are almost all interest and very little comes off the principal.

A. You're right; closing costs should be taken into consideration. The homeowners should divide that $4,000 (or whatever refinancing would cost) by the projected dollar saving in monthly payment. That gives them the number of months it will take to make up for the outlay. If they intend to remain in the property longer than that, it's worth refinancing.

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As for the drawback of beginning a new loan: If the current mortgage has only, say, 15 years left to go, one can refinance with a new 15-year mortgage. The shorter term will bear a bargain interest rate, and the principal portion of each monthly payment will be larger than if they'd started all over with a new 30-year loan.

Q. How do I file when I hold the mortgage on my daughter's house? I took out a line of credit on my house to pay for her house.

A. If it's in proper form, you can -- and should -- take that mortgage to the county's public records office yourself, and file it. If you used an attorney to draw up the papers, I'm surprised the lawyer didn't offer to take care of that important final step.

The fact that you're asking makes me wonder if you've been doing all this on your own. You need your daughter's notarized signatures, and if she has a husband who is part owner of the house, it'd be wise to have his signatures as well.

The document must be in correct form to be accepted for recording. If not, you'll probably need a lawyer's services after all. There will be some expense, but not too much. You're right in thinking the matter is important.

Q. I would like to put my house up for sale in the spring. I want to find a good real estate agent. Should I pick more than one in my area and talk to each of them and then decide which one I want to go with? Is it OK to talk to two agents from the same company?

A. It's a good idea to interview several agents, so you can find the person who inspires the most confidence. Along the way, you'll pick up useful information from each one you talk with, you'll get estimates of a possible sale price, and they'll have helpful suggestions for showing your home at its best.

Yes, you're free to call more than one from the same company, but that might turn a bit awkward. Instead, contact several different brokerages that seem active in your neighborhood.

When you finally pick an agent, by the way, you'll find that your listing contract is with the company, not the individual salesperson or broker you're working with.

Q. We bought our house three years ago with the understanding that the 15-year guarantee on the 3-year-old roof was good. Now our roof leaks, and the roofing contractor told us the guarantee is not transferable. There is nothing in the original contract that says anything (either way) about transferability. Is he right, or is he just trying to get out of his responsibility?

A. That's a good question for your lawyer, who can look at the contract and -- I hope it's in writing and that you have a copy -- the guarantee (warranty) itself. Or as always, you can take the contractor to small claims court yourselves and get a judge's opinion.

Q. Our next-door neighbor has ground water and swimming pool water to dispose of. He has asked us to allow him to pipe water across our yard and into a creek, which is bordering our yard. We will be selling our house in a year or two. Will this proposal have an effect on the sale? We'd like your opinion.

A. You can get better opinions from local real estate brokers after they actually look at the properties involved. Most agents are happy to offer free advice, particularly when the owners may be selling before too long.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

2013, Creators Syndicate Inc.

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