All four lenders that I initially called responded quickly to the voicemails I left them. Three were brokers that have several banks available to them and one was a local credit union.

They all said that they’re getting lots of refinance calls these days. I indicated that we would be interested in refinancing from a 30-year fixed rate mortgage to a 15-year fixed rate mortgage, we had enough equity in our house to refi and our credit scores were strong. The main unknown for us would be income requirements because we are both self employed and lending requirements have changed regarding the required documentation for self employed individuals.

All of the lenders I spoke with indicated that we should have no problem moving forward with a refinance, even with our self employment status. Our income history was strong enough, we would just need to submit more documentation (full tax returns, income statement and balance sheets) than a traditionally employed person. You know, people that work for The Man.

Some would be able to have the process done in as quickly as 4 weeks, while others indicated they were closing 60 days out now because of such a backlog with the paperwork processing of all the files they were closing. We weren’t too concerned about closing in 30 versus 60 days, just as long as we could lock our interest rate.

Surprisingly, all of the lenders had almost identical estimates for closing costs. None would be charging us points. Some could lock us right away, while others had to wait until the appraisal was done. We ended up going with a lender that gave us a 60-day rate lock and the lowest rate.

Three of the lenders quoted us a rate of 3.875%. The rate we ended up locking at? 3.75%. Whoo hoo! Better than our little financial models we concocted were using. So our overall savings on interest would be an additional $2,500 lower than what we budgeted. A grand total of $112,500 that we won’t have to pay some stinky bank. Double whoo hoo!

What’s happening at this point is reams and reams of paperwork. Lot of documents for us to read through and sign. Also lots of financial documents from us to scan and upload to the lender’s system. Next week is our appraisal. There’s actually plenty of data in our neighborhood for the appraiser to use. I have a value in my head for our house which I think is pretty conservative. We’ll see if they meet or exceed it. However, they’re apparently coming from New Haven, which makes me think that they don’t know Hartford all that well, so we’ll see what they come up with. We’ll let you know how that goes next week and I’ll talk more about the appraisal process then.

This is our first foray into video posts here on the Greater Hartford Real Estate Blog. It’s something we’ve been considering for quite a while, but just haven’t pulled the trigger. Now is the time, and this is the first test video. We’re going to focus on tips or other thoughts, and keep them short (like a minute or two). Check it out – we would love to get feedback!

The big questions:

1. Is it worth it – how much of an impact will a lower rates have? For us, the attraction is paying less interest over the life of the loan. We’re going to be trying to refi into a 15-year mortgage, with rates at right about 3.875% right now, which will actually increase our monthly payment by about $300 a month, but reduce the overall interest we pay over time by $110,000. (Holy crap!) We’ll knock 10 years off our current (remaining) mortgage. The principal portion of our monthly payment will be almost 3x greater than in our current mortgage.

2. Do we have enough equity in the house? Home prices have dropped in our neighborhood since we purchased, but our down payment and upgrades should make the appraisal on our home high enough to refinance without being forced to bring extra principal to closing.

3. Does this overcome the up-front investment in closing costs? Unfortunately, refinancing a mortgage has meaningful closing costs that will not be recovered. For example, we’ll need to hire an attorney, pay for an appraisal, buy title insurance, and pay the lender, among other things. We think the answer is yes, it does make sense to invest a couple thousand in closing costs now to reap the benefits over the coming 15 years (we don’t plan on moving).

4. Will a bank lend to us? We hope so! But I guess we’ll find out soon.

One of the main reasons we’ve decided to refinance is the lack of good investment options. Money market accounts pay basically nothing. Stocks are no longer the comfortable long-term bet they were during much of last century. Bond yields are very low, so interest rates are low. This also means bond prices are very high – they’re much more likely to fall in value than rise. Where should we be investing?

Rather than choose between those unattractive options, we’re going to take this opportunity to improve our debt situation. By paying 3.875% instead of 5.375% it’s like we’re “earning” 1.5% on the entire mortgage principal balance. Our investment in closing costs should break even after about 12 months.

Since we’re in real estate, we know a lot of lenders. I’ve started this morning off by calling 3 of them. We’ll see how the process goes and keep you updated on our progress and any bumps in the road. We figure lots of folks are contemplating this right now, or going through it themselves, so we might as well share our experience so others can learn from it. Wish us luck!

A key difference between the hedge fund’s strategy and HAMP seems to be the willingness to reduce the principal owed on the loans. The hedge fund forgives a portion of the principal in 90% of their modifications. Federally regulated banks subject to HAMP, according to the article, are more likely to lower interest rates, give homeowners time to catch up on late payments, and extend the length of the loan. They only forgive a portion of the principal in 2% of their modifications.

Despite the strong case that the article makes for the private market strategy over government involvement, it identifies two critical factors that limit the hedge fund’s effectiveness:

1. Many mortgages have thousands of owners. Because mortgages were packaged into securities for resale, the infamous Residential Mortgage Backed Securities (RMBS) that were part of the credit crisis, it is often impossible to buy (and therefore modify) individual mortgages – they have thousands of owners.

2. Banks don’t want to recognize losses. If a mortgage does have a single owner, like a bank, then that owner has to be willing to sell the loan at a steep discount in order for it to be attractive to the hedge fund. After all, they’re doing this to make money. The strategy banks currently employ of lowering rates and extending the term allows them to push any losses into the future.

In the end there is no suggested way forward, though presumably the author would hold up the private market model as the ideal. Reports from the government itself seem to show that the Federal programs are not working for everyone either. For many homeowners, the end result is likely to be foreclosure unless the economy and housing markets bounce back quickly.

Check out the full article for an interesting story, and by all accounts a successful mortgage modification strategy for certain homeowners.

These applications are great for staying in touch with people near and far, people that you know personally and even some that you don’t but have found because of common interests. Depending on your online habits, you may use the applications differently. Some people feel the need to update others on every aspect of their life like “Today I ate oatmeal for breakfast, am wearing striped socks, and my dog just sneezed.” Others use their accounts more sparingly and post news items that are of interest to them or an occasional update on their life.

This summer I’ve noticed that lots of my friends on Facebook and those that I follow on Twitter are posting updates about trips that they’re taking. Some are going to the shore for a week or weekend. Others are visiting family across the country. And others are leaving the country for European excursions. Foursquare updates let me know that someone just checked in at Tapas on Ann or the Starbucks in West Hartford Center.

I’m glad people are out enjoying themselves; relaxing, traveling, supporting the economy. But what I’m concerned about in the back of my mind is that they are announcing that they are not at their home. That they are gone for a few days or a week or longer. Do we really have a good control over who views this information and can they use it in a bad way? Will the wrong person get this information and break-in into your home? Once you know someone’s name, it’s really easy to find out where they live thanks to the Internet.

Who views this information is only as good as your Privacy Settings on Facebook. Or how good you are at controlling who follows you on Twitter. And what if you’ve posted something on Twitter and then someone else re-Tweets it so that whoever follows them can see what you’re up to?

I understand the social nature of these websites, but I also see some information sharing as an unnecessary risk. Kyle and I recently went away for two days. I talked about that trip on Facebook when we got back. The only people that knew we were away were a few people in our neighborhood that I contacted privately through email.

I’m not trying to be the social media police here. You may just want to think about who really has access to all of the information you post online before you announce that you’re leaving for vacation.

I’m assuming that many of the people that follow this blog use some form of social media. Am I overreacting here or do you also think about these types of issues?

PS- I am at home, so don’t try to break-in to my house!

It’s common for well qualified buyers to get rates below 5%, and we’ve heard of some rates as low as 4.25% on 30-year fixed mortgages with no points. We even saw a sign by the road advertising a 3.99% rate, though it was not clear what the other terms would be.

Here’s a chart from Mortgage-X.com showing rates going back to 1963, which is further than other charts we’ve seen.

Reproduced with the permission of Mortgage-X.com

Our Thoughts on Low Mortgage Rates

1. People shouldn’t buy houses because mortgage rates are low. Buying a home is a big commitment of time and money, so homeowners need to be in it for the right reasons. Securing a low mortgage rate might be a nice bonus, but it should not be used to justify a purchase – you need to want to own a home.

2. Those in the market for a new home can take advantage of the low rates in different ways. One option is to pay less each month for the same home they would have bought no matter what the rates. Another option is to get a more expensive home for the same monthly payment they would have had before rates fell so low. Finally, they could get a shorter loan (15-years or 20-years instead of 30-years) so that they can build equity faster and pay dramatically less interest overall.

3. Existing home owners may want to consider refinancing their current mortgage. There have been a couple articles recently (CNN, Wall Street Journal) about how refinancings are on the rise again, but that many buyers can’t take advantage because of strict lending requirements (their credit is too poor) and appraisal values (their home values have fallen and they don’t have enough equity).

4. Will rates go even lower? Nobody knows. At some point mortgage rates really can’t go any lower. The two primary inputs into the rates are the interest rate of the 10-year Treasury Bond and the spread above the Treasury that lenders/investors demand. The 10-year Treasury finished yesterday at 2.64%, which is very low from a historical perspective, but it’s possible it could go even lower.

As always, the place to start with everything mortgage-related is with a mortgage professional. They’ll be able to evaluate your specific situation to let you know which options are available to you. We would be happy to pass on the names of mortgage people we’ve used if anyone is interested.

Community Supported Agriculture Shares

For those of you that are interested in a one stop shopping type of method of obtaining locally grown fruits and vegetables, a Connecticut CSA (Community Supported Agriculture) operation may be worthy of consideration. The basic model with a CSA is that you purchase a share, sometimes sold in whole or half shares, at the beginning of the growing season. The farmer then uses your upfront payment as capital towards the growing season, to purchase seeds, labor, etc. Sometimes, you can pay for a portion of your share by volunteering on the farm. Then, you will receive a weekly distribution from the share over a set period of weeks. This is your dividend from the upfront payment. Buyers of the share assume some risk; if the growing season is plentiful, then the weekly distribution will be equally bountiful. However, if there are weather issues, such as the CT tomato and potato blight of 2009, the result is a smaller offering of produce.

Based on my readings and knowledge of local CSA operations, it appears that most CSA’s in the Hartford region require the weekly share to be picked up at the farming location. Farm share opportunities such as Holcomb Farm in East Granby, Rosedale Farm in Simsbury, Oxen Hill Farm in Suffield, and the George Hall Farm in Simsbury offer this type of CSA model. Local pickup makes it difficult to participate if you don’t live in an area that offers a CSA, although the Grow Hartford CSA is an up and coming urban farm model, along with the Urban Oaks Organic Farm of New Britain. Many of these CSA options have sold out for the 2010 growing season, so if you are interested in purchasing a share next summer, make sure to start the process in the late winter/early spring. CSA listings for the Hartford area can be found here on Buy CT Grown and here at CTNOFA (Northeast Organic Farming Association).

Delivery

A final option, which my wife and I just tried for the first time, is the recently launched delivery service Connecticut Farm Fresh Express. CTFFE delivers once a week on a year round basis. You can select from all kinds of Connecticut grown and produced products. Their online store opens Thursday evening, and closes on Monday at Noon. Orders are processed on Wednesday and delivered to your door for a fee that ranges between $5.00 and $15.00. For delivery to Glastonbury, it was $9.50. There is no minimum order, and the products available change each week, so be sure to check back frequently. This service runs throughout the winter, so it would be especially helpful to track down those Connecticut grown root vegetables to keep the stream of fresh produce flowing throughout the winter months (see photo of crazy carrots). We ordered some baby gourmet carrots, flounder and cod freshly caught off the Connecticut coast, as well as locally-raised beef, pork sausage and ground bison. Also, locally roasted organic Ethiopia Yirgacheffe coffee from Ashlawn Farm Coffee will be sampled for the first time tomorrow morning. The Hartford Courant had a nice write-up of the CTFFE operation and its founder, Deb Marsden, and we were pleased to support such an entrepreneurial start-up business.

Well, that blog entry has about exhausted this correspondent. Keep your eyes peeled for the next entry on one of the most important factors when examining towns for a potential homes purchase, namely, the type of garbage collection services provided!

Thanks for the update, Farm Boy, we’ll look forward to your next report.

As the summer season creeps into August, it seems to be as good a time as any to discuss the local farm scene in the Hartford area. The Connecticut Department of Agriculture website offers a wide array of information on options for buying local products. In the Hartford area, there are primarily three methods for purchasing local produce and other foodstuffs, with a startup delivery option also available. Today we’ll focus on the first two, Farmers Markets and Farm Stands & U-Pick.

Farmers Markets

There are several farmers markets that operate in Greater Hartford. In fact, with a visit to the Connecticut Department of Agriculture’s Farmers’ Market website, you can find a market pretty much every day of the week during the peak growing season from mid-June through early October.

Some of the more notable markets include the Coventry Regional Farmers Market on Sundays, and the Hartford Regional Market on Reserve Road, which operates year round in the wee hours of the morning from 5:00 a.m. to 9:00 a.m. Although I have never been, a representative of CT Grown told me, “Bring a Wagon and a Flashlight!” A web search on the Buy CT Grown website lists 63 Farmers Markets within a 25 miles radius of the 06106 zip code. Farmers Markets offer a wide selection of seasonal products at fair prices.

Farm Stands and U-Pick

Another popular initiative of the state’s Department of Agriculture has been the Connecticut Grown program. This has resulted in a great website, Buy CT Grown, which is an extremely helpful resource to locate all types of Connecticut grown and produced products, ranging from the standard fruits and vegetables to the more eclectic listings for distilled spirits and fish markets. This is also a great tool for locating Farm Stands and Pick Your Own/U-Pick opportunities.

The primary advantage to Farm Stands and U-Pick is that the prices tend to be more reasonable than Farmers’ Markets or other purchasing opportunities, because you are saving the producer the time and effort necessary to bring his or her products to market.

While there are many great farm stands in the area, South Glastonbury stands out for its U-Pick opportunities when it comes to fruit, especially berries (Strawberry, Blueberry, Raspberry and Blackberry) and tree bearing fruit (several varieties of Apples, Peaches, Pears, Plums, Nectarines and Cherries). Several of my favorites include Belltown Orchards, Dondero Orchards and Carini’s Berry Farm, although a trip to Rose’s Berry Farm for weekend breakfast is most likely in order for the first time visitor. Come fall, be sure to visit Woodland Farm for fresh pressed, unpasteurized apple cider.

Come back tomorrow for more on the Greater Hartford Farm Scene, including Community Supported Agriculture Shares and Delivery!

For those of you that don’t want to read the study, the gist of it was that only 43% of American adults know “all” or “most” of their neighbors by name. Twenty nine percent know “some” of their neighbors and surprisingly (to me) 28% claimed they knew “none” of their neighbors.

Really, how is it possible that more than a quarter of the adult population in this country doesn’t know the name of at least one of their neighbors?

Let’s take a look at this pictorially, shall we? Let’s say you live in the neighborhood pictured below. And let’s say that you need to provide at least the first name of one of the people in the 11 homes nearest to you. Can you do it? How many of your 11 closest neighbors can you name?

I understand that not all of us live in walkable neighborhoods with sidewalks and .25 acre lots- which realistically makes it a lot easier to know the names of our neighbors. But come on. Even if you live on a farm in the middle of nowhere, wouldn’t you know the name of your nearest neighbor? Simply because there might be an emergency. For example:

Erma: Hi Mildred, it’s Erma. Fred fell off the tractor again and it looks like he broke his leg. Can you come over and watch the kids while I take him to the county hospital?

Mildred: Sure Erma, I’ll be right over, just need to fire up the tractor…

See? Even people that live in the boonies need to know their neighbors and interact with them from time to time. [NOTE: Kyle and I both grew up in the boonies and we knew the names of our neighbors, so we are allowed to poke fun.]

So, my take on this survey? If you know the names of your neighbors, great! Maybe make an additional effort to go out and learn more. And if you know the names of none of your neighbors? Stop being such a recluse and, unless you’re agoraphobic, go out and learn your neighbors’ names. They don’t need to know your business, just your name. Because you never know when they could help you…

The gracious foyer welcomes you with its ornate turned staircase, arched doorway and shiny hardwood floors. Adjacent to the foyer, the formal living room offers plenty of space for entertaining and features a wood burning fireplace, access to the screened-in 3-season porch and beautiful original moldings. A cozy sitting room with built-in glass door cabinets leads you back to the foyer. The dining room will easily accommodate your social gatherings and provides plenty of built-in storage. Off the dining room, the kitchen has generous cabinet and counter space, an eat-in area, access to a deck and a laundry room.

Upstairs you’ll find a wonderful retreat in the master bedroom suite which has a sitting room, dressing room and full bath. Two additional large bedrooms and a full bath complete the second floor.

The third floor has three additional bedrooms, a full bath and three generously sized storage rooms.

Mechanically, a new, high efficiency gas furnace was just installed to keep you comfortable throughout the colder months. The home also features 200amp electrical service.

In the private backyard there is a 2-car garage and mature perennials, shrubs and trees for those that enjoy gardening. Or, if you prefer, just sit back, relax and get some fresh air on the rear deck or screened-in porch.

210 Terry Road is offered at $425,000. If you’d like to see this home, please have your agent set up a showing, or call me at 860-655-2125 to schedule a visit. Both floor plan and photos are available.