I picked this up off of the Internet:

Now may be the best time to gauge exactly where you are in the home financing cycle. It's always good to step back and look at the entire financing picture—where you've been, where you intend to go and where you'd like to be in five years. Homestore.com has discussed this "home finance check up" with a number of finance and housing experts to determine the five best home finance moves you could make right now. Some suggestions:

Best Move Number One: Wake Up and Smell the Green Assess where you are today financially speaking, and where you'd like to be in five years. Start by getting a detailed picture of how much you are spending to maintain your lifestyle, where you want to be several years down the road and how you expect to achieve that. Make sure you have checked your credit report at least once in the past six months. Examine your credit report carefully to make sure no one else has requested credit in your name and closed accounts you no longer use. This will prepare you for the future should you decide to refinance or trade up to a newer, larger home.

Best Move Number Two: Take Advantage of the Rise in Home Values Lisa Mihailuk, senior vice president at Countrywide, one of the nation's largest mortgage operations, notes that savvy individuals can use additional equity built up in their homes to pay off high-interest credit card debt or to modernize their current home. "In recent years, some homes that were valued at $85,000 are now worth $95,000. People can tap into that equity to pay off credit card debt or make improvements," says Mihailuk. Not only that, but interest on credit card debt is not deductible while mortgage interest is.

Best Move Number Three: Play It Smart When Refinancing Your Mortgage Before you sign up for a refinance deal, first talk to at least three financial professionals: a direct lender such as a bank, an experienced mortgage lender and a mortgage broker. All have advantages. The direct lender may offer lower rates because it doesn't have to share fees. And a mortgage banker can act quickly; if he or she likes the loan application, they can make a commitment immediately. Last, don't overlook a mortgage broker, since they represent 50 or more lenders and can shop the loan around.

Best Move Number Four: Seek No-cost Refinancing The reason? "Any loan fee you pay has to be amortized over the life of the loan," says noted real estate broker and syndicated columnist Bob Bruss of San Francisco. "Say you pay a $1,000 loan fee or points for a refinance," he continues, "that has to be amortized over the life of the loan, which can be about $33 a year on a 30-year mortgage. Instead, pay a little higher interest rate and get a no-cost loan where you don't have to pay title insurance, credit report and appraisal fees out of your own pocket. It may be at a little higher interest rate—7.12% instead of 7% —but it will all be deductible."

Best Move Number Five: Renovate Rather Than Relocate With the economy going through an uncertain phase, now may not be the best time for a move. If it isn't, don't deny yourself creature comforts. If you want that gourmet kitchen, then go for it —finance the renovation through a home equity loan. By using an equity line of credit, you can deduct the interest on your income tax. But check with your real estate professional to make sure that the improvements you make will add value to the home.

Nobody's perfect. Sometimes we make inadvertent mistakes even when we have the best intentions. But good intentions may yield some bad decisions when it comes to your personal finances. For homeowners, or even those who want to buy a home someday, here are the five worst mistakes you can make.

Worst Move Number One: Not Keeping Your Financial House in Order There are a few simple things you can do to keep your finances in good condition. Among them:

Check your credit report twice a year. Make sure your will is updated. Is your insurance protection updated? Do you need more insurance? The last one is a biggie. It's very important that you have enough insurance to protect your dependents and income—to say nothing of your home—in case of death or disability. Also, keep in mind that you can save several hundred dollars a year on homeowner's insurance and renter's insurance by shopping around. Compare rates. Worst Move Number Two: Thinking the Good Times Will Last Forever As the stock market has shown, what goes up must come down. So start tightening your belt now, just in case. Control impulse buying by using shopping lists and sticking to them. Avoid going into debt to support a lifestyle you cannot afford and never borrow money to spend. (That can mean taking out a loan, or even using a credit card to buy something you don't have money for today.) Remember: If you want to buy a bigger house tomorrow, you've got to plan now.

Worst Move Number Three: Failing to Be Charitable Charitable deductions can add up to tax savings later on and now is the time to take them. Storing an old printer or monitor in the basement? Donate it. It might be worth several hundred dollars to a charitable organization. And you get to take the deduction on April 15.

Worst Move Number Four: Refinancing Too Large an Amount Edith Lank, syndicated columnist and author of "The Homebuyers Kit" and "The Homeseller's Kit," says one of the worst home finance moves "is falling for those offers to mortgage your home for 125% of its value—and there's a new one just out for 105% from a reputable bank that should know better." The noted financial and residential real estate author cites several reasons for such refinance deals being a worst move: "You probably pay high interest, and the Internal Revenue Service (IRS) lets you deduct only the interest paid on the actual value of your home. [In the end, such] risky, financial problems could result in loss of your home."

Worst Move Number Five: Getting a So-so Refinance Rate Shop around. You may think it's easier to work with your existing mortgage lender but in most cases your lender will require the same documentation that others do. Your current lender will still have to verify your employment income and the like. So it might pay to talk to other lenders as well.

-- Ken S. in WC TN (scharabo@aol.com), November 12, 2001

Answers

Pretty good information.

I would just like to make a comment on best moves #2 and #4. The last sentence in each says that all the interest is deductible. That is not really the case. Unless you have enough deductions to get above the standard deduction, $7350 for a married couple, $4400 for a single person, nothing is deductible. Just keep this in mind. If you are doing this to get a deduction, do your math and make sure you will actually get one.

On best move number four the advice given is that we should go for the no cost refinancing. Again do the math and check which way YOU will come out the best.

Talk to you later.

-- Bob in WI (bjwick@hotmail.com), November 12, 2001.

It is not as simple to donate working computers as you might think--a lot of places that you might think would would be desperate (churches and schools for instance) for stuff that works are very picky. Some places turn up their noses at computers only 2 or 3 years old. Very sad.

Would also add that if you are staying in your house (not planning to move) save the refi costs and hassles, and just make extra payments on your mortgage.

-- GT (nospam@nospam.com), November 12, 2001.

Here's a question for you all. Would it be better to pay off our mortgage with our savings or keep the mortgage and write it off? Our bookkeeper said to keep the money and invest it but my husband doesn't feel comfortable doing that. (He was quick to point out the latest stock problems) I don't like paying all that interest for the house if I don't have to but don't want to pay alot in taxes either. So, what do ya think?

-- Dee (gdgtur@goes.com), November 12, 2001.

Dee, here's the simple answer. IF the numbers work (the interest on your loan is higher than the total of your current return on your savings AND the tax savings, if any, from maintaining a mortgage)then paying off your mortgage makes sense.

You can do that math yourself simply enough. Just take your annual mortgage interest cost and subtract from it the interest you'll earn on your money leaving it where it is and then subtract whatever tax savings you may gain from having paid that mortgage interest. If the total is a positive number, pay it off. If it's a negative number, don't.

The one other thing I'd like to see you consider doing if you do pay off your mortgage is establishing a home equity line of credit with your bank or whomever. That way, if something unforseen were to happen, you'd still have instant access to funds just as you now do with those funds in your savings. As with any loan, however, make sure you shop around not only for rates but also for no upfront fees and no annual maintenance fees for your credit line. I hope this helps.

-- Gary in Indiana (gk6854@aol.com), November 12, 2001.

Good information but remember that the finance and real estate experts need you to refinance and move in to the ever bigger house to make a living. Refinancing can make sense if the interest rate difference is large enough between your loan and the going rate. Home equity can be good to resolve credit card problems but I would avoid using the money for anything else. Always buy anything but property with cash. That way you know if you can afford it. We have saved and invested over the years and have paid off our debt and mortgage. It gives you the freedom of not having to make those payments. You will also have more cash money to use and save every month. Investment people will encourage you to keep all your money invested. If your mortgage interest is more than your investment return, pay off some debt. The tax deduction is nice but also remember the amount of interest you will pay over the life of the loan. Use a mortgage interest calculator and see how much more you will pay! Makes the tax deduction look small.

-- Tom (tomdarsavy@cs.com), November 12, 2001.

I don't think you "need" to establish any kind of line of credit when you pay off your property. There are only too many places willing to loan you money at any time (and believe me, there always will be), even if you are retired and on fixed income. Also remember that there is such a thing as a reverse mortgage if you don't have anyone to leave your house to if you really need the money after you pay off the house.

Also Tom is right. Never get a loan just for the tax deduction--it is the worst reason to get one.

-- GT (nospam@nospam.com), November 12, 2001.

I don't care what they say. when I turned 40 and owed 11 grand on our place I wrote the bank a check for the full amount and I now fully own the property. abstract is in the safe deposit box with no mortgage or any type of lien on the property. The best move tax wise? probably not. Those of you who are paid up understand what I mean and why I paid it off as soon as possible.

-- dogface (k9kid@zippo.com), November 12, 2001.

With the current world conditions I would never think about putting more debt against my home for paying off credit cards and other consumer purchases. If you have credit card debt get busy and pay it off as fast as possible. No I don't think we should draw back into a shell and not live life as normal just don't endanger your home. I went out the week after 9/11 and bought a new van. Wife really didn't like the idea but after a while she saw why I did it.

-- David (bluewaterfarm@mindspring.com), November 12, 2001.