Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, April 7, 1993 TAG: 9304070066
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: SANDRA BROWN KELLY
DATELINE: LENGTH: Medium
FALLING RATES MAKE REFINANCING AN ATTRACTIVE OPTION NOW
For homeowners paying off mortgages with 9 and 10 percent interest rates, this is like Christmas. On a 30-year, fixed-rate loan, mortgage lenders are quoting prices under 8 percent, which makes refinancing a serious consideration for many people.One mortgage broker had a computer program running at last month's Home Show at the Salem Civic Center that allowed shoppers to try out any combination of hypothetical rates and terms of loans.
Refinancing is appealing now, and most lenders are geared up to handle the business.
Some lenders take applications at their branch offices; others will even send a loan officer to your office.
If you want to speed up the process, be prepared with information, such as numbers on your bank accounts and credit cards, your income and the size of your current mortgage and other loans.
Also, pull out a year's worth of canceled checks for mortgage payments in case a lender will accept that in lieu of further verification of how promptly you're paying.
If your current loan is fairly new, you might save some costs by dealing with the same lawyer and appraiser you used previously. At least you should be able to.
Leon Geyer, an economics specialist for Virginia Tech's extension service, says there are two situations that make refinancing attractive: when you can get the same mortgage at lower monthly payments, or when you can keep the same monthly payment while reducing the overall number of payments.
The rule of thumb is: Refinancing is feasible - meaning the long-term savings offsets the upfront processing and closing costs - if you can reduce your interest rate by 2 percent.
Other tips from Geyer:
A fixed mortgage rate might be more attractive if you plan to make payments for many years, or you are close to retirement or for other reasons don't expect your income to rise considerably.
If, however, you plan to stay in your house only three to four years or if you are young and expect large increases in income, a variable-rate loan might be best.
If you do select a variable rate, be aware of the cap, the highest rate allowed under the contract. You need to be able to afford the payments at the highest rate, even if you think it's unlikely the lender will ever charge it. If the cap is 12 percent, ask yourself if can you afford payments at that rate?
Don't assume that one lender's or broker's answers will apply to another lender or broker. Ask all the questions of each lender.
You'll probably get a lower interest rate but a higher monthly payment on a 15-year loan. So decide which is more important to your personal financial situation. In either case, ask if there are restrictions to paying in advance.
Fashion Bug and Fashion Bug Plus clothing stores have put a new twist on home-party sales with a Too Busy to Shop promotion.
Last week, the units of Charming Shoppes Inc. of Bensalem, Pa., began inviting customers to schedule after-hours, in-store get-togethers for as many as six friends. You bring the friends and get a $25 gift certificate.
Shopping parties also can be scheduled during open hours, said Martha Clark, second assistant manager at the Towne Square Shopping Center store in Roanoke.
"Haute-to-go" is the latest promotion for 7-Eleven's new Cafe Select flavored coffees.
The Dallas, Texas-based convenience-store chain, which has traded on a fast-to-go coffee trade, in March added five flavored brews and plans 18 varieties by the end of the year. The concept taps into the growing specialty coffee market that had sales of $1.5 billion in 1989. A nice touch: the price will be the same as for regular coffee.
7-Eleven said it sells 1.25 million cups of coffee a day in North America.
Tony the Tiger is being benched by Kellogg's. The cereal maker is putting Seattle Mariner Ken Griffey Jr. on the front panel its Frosted Flakes for a limited edition of the cereal. It is tied to Kellogg's sponsorship of major league baseball.
Griffey, 23, also will be in a future Frosted Flakes television commercial created Kellogg ad agency Leo Burnett Co. He's the first athlete to appear in a Frosted Flakes spot. Griffey is said to be a longtime consumer of Frosted Flakes.
The brand is No. 2 behind General Mills' Cheerios in the $7.3 billion retail ready-to-eat cereal business, tracked by Nielsen Marketing Research for the 12 months that ended Feb. 20.