Raleigh, N.C. — March 21
Recent news reports surrounding a crisis in the mortgage industry are a reminder to employers that financial concerns could negatively affect the emotional well-being of employees.
“Time spent worrying about financial pressures due to a foreclosure or other concerns can mean the loss of an employee’s focus and productivity,” said Alan King, Workplace Options president. “Phone calls to lending institutions or a search for solutions on the Internet means an employee can’t focus on the job at hand.
“This is why it is in the employer's best interest to assist their workforce as much as possible by educating them on mortgage options, pitfalls and the consequences of default.”
Workplace Options (WPO), a provider of work-life employee benefits, recognizes the burden a financial crisis can place on families.
Through its Financial Assist program, WPO offers financial support and education programs to employers and their employees.
Financial Assist offers access to certified financial professionals as an employee benefit.
Services include housing education, debt management, bankruptcy prevention and many other tools needed by employees looking for financial advice and assistance.
WPO offers the following tips for those looking to take on a mortgage for a new home or are considering refinancing:
- Research current interest rates. Check the real estate section of your local newspaper, use the Internet and call a mortgage broker or at least six lenders for information.
- Have lenders provide rates for 30-year, 20-year and 15-year mortgages. You might be able to save thousands of dollars in interest charges by getting the shortest-term mortgage you can afford.
- Ask for details. Be sure to get the annual percentage rate (APR), which takes into account not only the interest rate but also points, broker fees and other credit charges expressed as a yearly rate.
- Ask whether the rate is fixed or adjustable. The interest rate on adjustable rate mortgage loans (ARMs) can vary a great deal over the lifetime of the mortgage. An increase of several percentage points might raise payments by hundreds of dollars per month.
- If a loan has an adjustable rate, ask when and how the rate and loan payment could change.
- Find out how much down payment is required. If you put down less than 20 percent of the home's purchase price, you might be required to purchase private mortgage insurance (PMI) to protect the lender if you fall behind on payments.
- If PMI is required, ask what the total cost of the insurance will be. How much will the monthly mortgage payment be when the PMI premium is added and how long you will be required to carry PMI?
- Ask if you can pay off the loan early and if there is a penalty for doing so.
- Consider refinancing your mortgage when rates go down if you plan on keeping the mortgage for several years.
- When comparing mortgages, don't forget to include the extra fees you must pay for the new mortgage.