ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, January 29, 1996 TAG: 9601300007
SECTION: MONEY PAGE: 6 EDITION: METRO
COLUMN: Money Matters
SOURCE: MAG POFF
Q: I have a mortgage of $52,000 at 8.5 percent for 30 years. At what percentage of interest would it be advantageous to refinance? What is the average cost of refinancing? I expect the rate to fall.
A: Michael Hincker, head of the Roanoke office of National City Mortgage, said you can count on about $1,000 of hard costs if you refinance your home. This can be refinanced along with your home.
The situation depends on how long you plan to live in your present home. If you refinance, you must live there long enough to offset the up-front costs.
Based on your mortgage, he said, you can cut $36 a month from your house payment if you refinance at 7.5 percent and no points. If you refinance at 7.25 percent and one point, you would cut $45 a month. So you would pay off the refinancing costs in 27 months and 22 months respectively. After that, the monthly saving is clear profit.
When you think rates have fallen as low as they are going to go, you should refinance if you plan to live in your house two or three more years. Remember, however, that it's almost impossible to time the peaks and valleys of the interest rate market. Mortgages generally follow bidding for Treasuries rather than the prime rate.
Putnam Group
reputation reliable
Q: Can you give me any information on the Putnam Group such as ratings and savings?
A: Putnam is an old and reputable sponsor of stock and bond mutual funds. Its family has more than 30 funds with a wide range of performance records because each fund is managed separately. Some funds also do well in certain markets, as balanced funds generally did well last year. Others, particularly those narrowly aimed at certain areas, such as Asian stock markets, generally fared less well last year.
You must first decide which type of fund best meets your goals, objectives and tolerance for risk. Then you send for the prospectus for that particular fund and check its performance.
Case of the church
copier contract
Q: Do you have any suggestion, short of hiring a lawyer and going to court, of how our church might get part of its money back for a canceled contract with an area copier company?
The company contends that, even though the contract states that either party has the right to cancel at any time before 30 days of expiration of this contract, there is no call for the refund of any monies. If there is to be no refund, what possible reason would we have to cancel the contract?
Enclosed are copies of the maintenance agreement, the company's invoice and a letter sent by our treasurer asking to cancel the agreement dated July 12, 1995. Because she received no reply, she called the manager, who said no money would be refunded. I subsequently called the president, who promised to review the situation and get back to me, which he has not done.
We have used this copier for a number of years. Although it gave us a fair amount of problems, their service was excellent and fast, so we were not too handicapped in using it. We renewed our service contract last May and started having serious problems shortly thereafter. The service man said the machine was old and they could no longer replace the drum. After several weeks when we had to contract out our bulletins, we decided to buy a copier from a competitor. A member of the church took the old copier for his personal use but doesn't want the contract. We had received excellent service, but we expected a refund of part of our $1,100 contract since it had 10 months to run.
A: You do not have a good case, with or without a lawyer, under terms of the contract you apparently signed.
The contract clearly provides that it would run from year to year automatically unless terminated by either party 30 days before the anniversary date.
"Either party may terminate this agreement upon written notice to the other party, given not less than thirty (30) days immediately prior to any anniversary date hereof," the contract reads.
For the services specified in the contract, you paid $1,086.28 "in advance" for the year. Further, you would have had to pay in advance for each subsequent renewal period.
In short, you contracted to pay for a full year of service. The contract could be canceled only with notice 30 days prior to the automatic renewal.
Your treasurer's letter may or may not be considered the required notice of termination of the contract. She should write another letter before April specifically stating that the contract is terminated. You might again approach the owner for a waiver of the contract on the grounds that you are a church.
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