Archives

October 2008

Good news for consumers

”Ironically enough, consumers benefit in three ways from all the turmoil going on right now on Wall Street,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. These benefits include:

1 - Greater Negotiating Power on Underwater Mortgages. “Wall Street is finally marking down the value of their mortgage related assets to levels where it is very attractive for mortgage servicers to negotiate with distressed home owners and modify their mortgages,” said Nicholas. Consider this illustration for more details:

http://www.cmpsinstitute.org/pdf/WriteDownsandHomeownerNegotiatingPower.pdf

Also, more info on this can be found on this through a recent television interview conducted on Monday, September 15, between Fox 2 Detroit and CMPS Chairman Gibran Nicholas:

http://www.myfoxdetroit.com/myfox/pages/Business/Detail?contentId=7438423&version=2&locale=EN-US&layoutCode=VSTY&pageId=4.1.1

2 - Profit on Sale of Financial Assets Acquired through Government Takeovers. “The crisis with AIG is kind of like a homeowner who owns a $1mm house and can’t afford next month’s payments on their $100,000 mortgage,” said Nicholas. “Even as it is virtually impossible to expect the homeowner to sell their $1 million home at a fair price in just one week, is also very difficult for large companies like AIG to sell assets and raise capital in short periods of time. The only difference between AIG and the homeowner in this scenario is in the number of zeros involved. The US Government is the only entity that is large enough to help AIG raise enough funds in such a short period of time in order to help the company maintain its financial obligations. It’s as though the government just got 80% control of that $1mm property in exchange for giving the property owner some more time to sell the property at a decent price.”

The Fed stands to make over 11% interest (LIBOR + 8.5) on the $85 billion line of credit they extended to AIG yesterday. Also, through the 79.9% equity stake the government now has in AIG, taxpayers stand to make a profit when the government sells AIG’s assets in the coming months in order to repay the loan. “Just because you can’t sell something quickly in two or three days doesn’t mean it isn’t worth anything,” said Nicholas. “AIG just needs time to sell some of their assets in an orderly fashion and at a fair price.” The loan from the Fed gives them that time and taxpayers stand to profit because they just became AIG’s biggest shareholder at virtually no cost other than the short term Fed loan.

3 - Low Mortgage Rates. Interest rates on fixed rate mortgages are tied to the Fannie and Freddie mortgage bonds that trade on the bond market. As Wall Street goes through crisis, and as the government bailout of Fannie and Freddie makes their bonds very attractive and almost risk-free for investors, mortgage rates should remain low throughout the near future. “American homeowners can take pride that their borrowing costs are among the lowest in the world, and even lower than the rates that many of the big Wall Street firms are paying right now,” said Nicholas. “Even if you have an adjustable rate tied to the LIBOR or Prime index, these rates should also remain low well into 2009 because they closely track the Fed Funds rate that is controlled by the Federal Reserve. The Fed really has no desire to increase interest rates in the middle of credit crisis.”

The only losers in this scenario are the homeowners who don’t qualify for Fannie and Freddie loans. “Unfortunately, these home owners will continue to see their borrowing costs increase due to the credit crisis and lack of liquidity among banks and financial institutions,” said Nicholas.

2:08 PM - Oct. 31, 2008 - comments {0} - post comment

Keep your home pest free

This article is by Carl Brahe, Certified Home Inspector and Certified Commercial Inspector.

In Colorado we have few pests compared to most places. Our dry climate make it harder for moist environments to exist that most pests require to survive. For pest to live in our homes they must have a way to enter, sufficient moisture and food to live. The food is usually other pests.

Summer is the most common time for insects and arachnids to move into your house. Birds like woodpeckers may move in during spring to nest. Fall is the most common time for rodents to move indoors.

To get into your house pest must have a way to enter. Insects and arachnids can enter through very small spaces, hitch a ride on people, pets, plants and produce, or hatch inside the house.

Mice need a hole only the size of a dime to enter and can squeeze under a door with a gap of ¼ inch. Rodents will use existing holes for entry but can also make their own. Rats are such tremendous chewers that they sometime chew through plumbing to get water.

This roof belonged to a man who enjoyed squirrels so much he nailed a board between a tree and the house for easy access for the squirrels. They chewed a hole through the roof and made a nest in the attic.

1:56 PM - Oct. 29, 2008 - comments {0} - post comment

Choose the best lender

With all of the mortgage industry’s recent changes, especially those related to high loan-to-value loans, credit score-based pricing, and increased scrutiny around appraisals, choosing a mortgage lender is critical.

1. Liquidity is tightening, and a lot of mortgage companies are struggling to fund their loans. Correspondent lenders’ credit lines are shrinking, and brokers have less “wiggle” room with their wholesale lenders, scared by their new re-purchase agreements. Borrowers should be encouraged to work with well-capitalized lenders, ensuring their funds will be there when needed-at the closing.

2. Borrowers should always work with a lender that can accommodate all types of loans, including FHA, VA, Conforming and Non-Conforming loans. With the recent price increases with PMI (private mortgage insurance), FHA has become much more attractive than in years past. With recent MIP (FHA’s mortgage insurance premium) changes, higher credit score FHA buyers, even those with 10% down or more, may benefit by comparing an FHA loan with a similar conforming loan.

3. Buyers should always get preapproved, as opposed to prequalified. With no assurances of what future mortgage industry changes will look like, buyers’ agents should ensure that their time investments are going to pay off in the future. In order to do this, agents should insist on a fully underwritten preapproval (subject to appraisal) before house hunting and presenting an offer. Likewise, sellers should always demand, before tying up their property for 30 days or more, that a “preapproved” offer is being presented.
Nobody benefits when a listing is “tied-up” to find out later that a “prequalified’ borrower’s underwriting terms have changed and, as a result, no longer qualify for a loan.

4. Sellers, if mortgaging their next transaction, should also get preapproved prior to listing their current home. With recent mortgage changes, some sellers may not qualify for a new home loan after they sell their current residence. None of us needs the humbling experience of explaining to a recent home seller that they have to lease rather than buy, after the fact.

5. And lastly, recent documentation changes have slowed the processing time for many loan types. Agents should recommend to their clients that they should work with a lender that will give them an “on-time” closing guarantee. A responsible lender will “put their money where their mouth is” if they are confident of their service offering, motivating them to hit that important closing date.

1:51 PM - Oct. 27, 2008 - comments {0} - post comment

Protect Yourself from Wall Street

This article is by CMPS  a training, examination, certification and ongoing membership program for financial professionals who provide mortgage and real estate equity advice.

”With Wall Street engulfed in the biggest financial crisis in a generation, there are a few things that consumers can do to protect themselves from this perilous storm,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. Here are 4 suggestions consumers should consider to protect themselves:

1 - Make Sure Your Investments Are Protected Through the SIPC. The Securities Investor Protection Corporation (SIPC) was created in 1970 as a non-profit, non-government organization funded by its members: broker-dealers that trade in stocks, bonds, mutual funds and other investments in the financial markets. The primary role of the SIPC is to return funds and investments to investors if the broker-dealer holding these assets becomes insolvent.”The SIPC does not cover you if the value of your investments goes down,” said Nicholas. “The SIPC makes sure that you recover the assets in your investment accounts if your stock brokerage firm or the financial institution where you hold your investment account goes bankrupt. For example, if you have an account at Lehman Brothers or any other financial institution that goes bankrupt, the SIPC will make sure that you recover the assets you hold in the investment account. However, if the stocks or other investments that you hold in your investment accounts have lost value due to a decline in stock prices or market conditions, the SIPC will not reimburse you for the lost value of your investments.”

SIPC coverage is limited to $500,000 per customer, including up to $100,000 for cash. “This does not mean that you will only recover $500,000 worth of your account,” said Nicholas. “Under virtually all circumstances, you will recover the full amount as part of the unwinding and liquidation of the brokerage firm.” If sufficient funds are not available in the firm’s customer accounts to satisfy all the claims, the reserve funds of the SIPC are used to supplement the distribution, up to a ceiling of $500,000 per customer, including a maximum of $100,000 for cash claims. Additional funds may be available to satisfy the remainder of customer claims after the cost of liquidating the brokerage firm is taken into account. According to the SIPC website, it typically takes one to three months for investors to recover their property from an account at a failed brokerage firm.

SIPC covers stocks, bonds, mutual funds and other securities registered with the Securities and Exchange Commission (SEC), which is the government agency that oversees the SIPC. The SIPC does not cover unregistered investments such as commodity futures contracts or commodity options. In response to the impending collapse of Lehman Brothers yesterday, the SEC issued a press release specifically indicating that it is taking actions to ensure that those who have accounts at Lehman Brothers will recover the assets in their accounts in the event that Lehman becomes insolvent.

2 - Make Sure All Your Bank Accounts Are Covered with FDIC Insurance. The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that was created in 1933 to insure bank depositors and protect them against the failure of their bank. The current limit on FDIC insurance is $100,000 for bank accounts and $250,000 for retirement accounts.

“You should make sure that all deposits over the limit are held in separate accounts owned by different individuals or entities,” said Nicholas. “This means that if you are married with two children, you can have one account in your name, one account in the name of your spouse and one account each in the names of your two children, all with the maximum of $100,000 in deposits, and you would still be fully insured for the full $400,000.”

Additionally, if you have a corporation or limited liability company (LLC), your business can also have an account at that same bank and it will also be insured up to the $100,000 limit. The only caveat is that the company must be engaged in an “independent activity,” meaning that the entity is operated primarily for some purpose other than to simply increase your insurance coverage. When two or more insured banks merge, the deposits from the assumed bank continue to be insured separately for at least six months after the merger. This grace period gives you the opportunity to restructure your accounts, if necessary.

If your deposits at one bank exceed the FDIC limits, it’s advisable to move the money and open up some new accounts at other banks that are not affiliated with one another and that are not owned by the same parent company. Additionally, you may consider asking your bank if they participate in the CDARS® network. CDARS stands for Certificate of Deposit Account Registry Service, and it is offered by nearly 2,500 financial institutions across the country. When you place a large deposit with a financial institution that is part of the CDARS network, the financial institution uses CDARS to place your funds into certificates of deposit issued by other banks in the network. This occurs in increments of less than $100,000 to ensure that both principal and interest are eligible for full FDIC insurance.

3 - Max Out Your Home Equity Line of Credit Before Your Lender Cuts Off the Limit. “Lenders have been arbitrarily reducing credit limits on home equity lines of credit,” said Nicholas. “If you still have credit available on your home equity line, it could be very beneficial for you to draw out the money now before the lender reduces your limit. In this environment, it’s probably a safer bet to have the cash sitting in your FDIC-insured bank account in case you lose your job or in case you need the funds for any other reason.”

4 - Stop Making Extra Mortgage Payments and Take Out a Mortgage Even If You Don’t Need One. “Cash is king in a liquidity crunch,” said Nicholas. “The worst thing you can do in this environment is dump more of your cash into your home equity because you may not be able to get access to it if you run into financial difficulties, if the housing market continues to decline, or if the credit crunch gets worse. Although it sounds counter-intuitive, you should have as big a mortgage as possible - even if you don’t need it - and leave as much cash as possible in a safe, liquid place that is readily available to you. This empowers you to weather the storm and also have your funds available to take advantage of bargain opportunities that are becoming available because others have not followed this advice. In this environment, the one with the most cash wins.”

1:43 PM - Oct. 25, 2008 - comments {0} - post comment

Fantasic Freebies

These days, many people are looking for new ways to cut costs and save money. Here are five great ideas from the editors of Kiplinger:

Free TV & Movies: Full episodes of more than 300 shows from NBC Universal and Fox stations are available on www.hulu.com. The site also offers over 165 free full-length movies in a variety of genres. In addition, other networks like ABC and CBS are also starting to post full episodes of various shows on their Web sites.

Free College Savings: Sign up at www.Upromise.com and you can turn everyday purchases into college savings. You'll earn cash rewards for eligible purchases of groceries, gas, dining out, travel, and online shopping. The money is then automatically transferred to your child's 529 account. In addition, your family and friends can help, too, by linking their rewards to your Upromise account.

Free Directory Assistance: The next time you need to call 411, dial 1-800-FREE-411 instead for free directory assistance for both residential and business listings. While you may have to listen to a short advertisement after the voice prompts, you will still save a few dollars.

Free Credit Report: By law, you can receive one free credit report once a year from each of the three main credit bureaus. Visit www.annualcreditreport.com to request your report.

Free Recipes: Need some inspiration in the kitchen? Check out www.allrecipes.com and www.Epicurious.com where you can access over 100,000 recipes for all kinds of meals...no matter your level of expertise. You can search by meal, occasion, or ingredient, and there are plenty of user reviews and cooking demonstration videos to help.

For twenty-five more great freebies, visit www.kiplinger.com/features/archives/2007/08/free.html.

1:29 PM - Oct. 23, 2008 - comments {0} - post comment

Think like a retailer

This article is by Chris Kaucnik is marketing director for Home Warranty of America.

Yes, a home is a large asset-not a coffee maker or an impulse purchase-but employing the innovative techniques we discuss here, adapted from retail strategies, can help you achieve your goals.

See through your prospects’ eyes and consider these three factors about them:

1) Visual judgments are made in a second in today’s environment
2) Sound is a key factor in the sale and often overlooked
3) Distinctive benefits-not common features-impress their memory

Visual-Think Bling

Guide the first portion of your prospect’s walk-through. Show the most irresistible elements of the home first, from a benefits point of view. This mirrors the retail technique of putting the newest, most profitable vanity products toward the front of the store such as cosmetics and jewelry-the hot new merchandise.

Today, clients sort out the basics they are looking for in a home before they view it live. They know it has four bedrooms, a three-car garage, and 2.5 baths when they walk in.

But there may be hundreds of houses for sale in their geographic area that meet these and their other basic requirements. Focus on one or two outstanding aspects of the home, no more. This will set the positive impression.

Where’s the Bling?

A unique feature could be the great, old-brick patio and spa in the backyard, or the professional series appliances in the kitchen. No matter what, every house has them and they can be turned into benefits that sell. Creating this unique, first impression puts you and the house in a special place in your prospect’s memory-even if they go on to see many more homes.

Showing the Bling

While you are showing a unique benefit or two, start an informative conversation perhaps about the neighborhood, schools or shopping. Casually, find out a bit about their lifestyle. Then let the prospect move about the rest of the common areas in the home without you.

Keep your goal in mind which is to make a distinct impression. So instead of telling the prospect there is a clubhouse and pool, mention the fun they will have with the clubhouse and pool in the summertime. There is a difference.

You are painting a scene in their mind. One they could slot their family into easily. Remember, prospects will sub-consciously limit the mindshare they give you, so use it wisely.

This is what a great retail sales person will do. They won’t walk you back to the sales area, but will instead mention all the new, full-priced merchandise up front, ask you what you are looking for and steer you to a particular area. Then, they will let you move to the sales area by yourself.

Audio-Think Ambiance

Don’t discount the value of your prospect’s ears. Great retailers and retail brands view audio as a science and have seen it add greatly to their bottom lines.

Create an audio mood that makes them feel like they can live there and be happy. Sounds direct our feelings, thoughts, actions and speech. When the music fits our expectations, we stay in that environment longer and buy more.

Be creative, what music matches this home’s personality? Chances are it will match the prospect’s personal preference too or be close enough to please. After all, they did select this style of home to view.

Audio Buying Study

In 1998, there was a test conducted in a British wine shop. On certain days, French music was played and on certain days, German music. On German music days, German wines outsold the French by a ratio of three to one and visa versa.

Perhaps it makes sense then to play some music in your listings when prospects are present. Pick different selections for a classical home style then a contemporary one for example, or for a Victorian versus a Spanish and Mediterranean style. You get the idea. This will further differentiate this home from the others for sale in the neighborhood.

8:57 AM - Oct. 21, 2008 - comments {0} - post comment

What $1 million buys

Although both are waterfront cities, something besides the salt water separates La Jolla, Calif. on the Pacific Ocean from Sioux City, Iowa on the Missouri River-a $1.7 million dollar difference in the cost of homes studied in the 2008 Coldwell Banker® Home Price Comparison Index (HPCI). In an annual comparison of similar homes in 315 U.S. markets, La Jolla topped the chart as the most expensive real estate market in the nation with a $1,841,667 average home price. Sixteen hundred miles away in America’s heartland sits Sioux City, the most affordable real estate market in America, where a similar home would cost $133,459.

La Jolla and Sioux City are not alone in representing California and the Midwest. In fact, eight out of ten of the country’s most expensive housing markets are in California, and eight Midwestern cities make the list of the nation’s 10 most affordable home markets.

Differing from most housing reports which compare median prices, the annual Coldwell Banker HPCI, which first launched in the late 1980s, provides an apples-to-apple comparison of similar 2,200 square foot, four-bedroom, two-and-a-half bath homes in 315 markets across the United States, in addition to Puerto Rico, Canada and a sampling of countries/territories outside of North America where Coldwell Banker has a presence.

“This year’s study comes at an interesting time in our nation’s history with the impact of the housing correction and mortgage financing serving as critical economic issues in the presidential election,” says Jim Gillespie, president and chief executive officer of Coldwell Banker Real Estate. “While Americans move for lifestyle reasons, a home is usually a family’s most valuable investment asset. For those who want to get into the housing market, I believe this is the smartest time in my 33 years in real estate to buy a home. Combined with the amount of homes on the market and historically low interest rates, the correction in prices has brought affordability levels down.”

“Looking deep into the survey, half of the markets surveyed showed an average price for this very nice type of home to be less than $300,000 showcasing the affordability of homeownership across our nation,” continues Gillespie.

A “Snapshot” of U.S. Home Affordability

Offering a “snapshot” of affordability across the U.S., the Coldwell Banker HPCI evaluates average home values for select 2,200 square foot single-family dwellings with four bedrooms, two-and-one-half baths, a family room (or equivalent) and a two-car garage.

The cumulative average sales price of the four-bedroom homes surveyed in the 315 U.S. markets (including one in Puerto Rico) covered in the Coldwell Banker HPCI is $403,738, a 4.4% decline from the $422,343 reported in the 2007 Coldwell Banker study.

According to the company, through the comprehensive HPCI section on www.coldwellbanker.com, prospective home buyers and sellers can calculate what their homes may be worth in other areas in the United States and gather preliminary intelligence about the affordability of housing from one market to another.

2008 Coldwell Banker® HPCI - Highlights and Top Market Lists

- La Jolla, Calif., edges out Greenwich, Conn. ($1,787,000) and other West Coast markets as the most expensive U.S. market in the study. Also on the East Coast, Boston, Mass. ranks as the ninth most expensive ($1,493,750). Beverly Hills was the most expensive studies U.S. market last year at $2.21 million. Note: Manhattan in New York City was not included in the study because of the lack of comparable single-family homes.
- Candidate comparison: Barack Obama’s primary residence is Chicago, Ill., where the average home price is $863,300, whereas John McCain lives in Phoenix, Ariz., which averages $288,000.
- Swing states: Both candidates are likely to spend a large amount of time campaigning in several key “swing states” between now and November. The national economy and the housing market represent critical issues for many of these voters. The average price in each of those states is as follows: Colorado ($402,497), Florida ($357,596), Indiana ($224,906), Iowa ($196,134), Michigan ($201,291), Missouri ($212,850), Nevada ($287,375), New Hampshire ($401,697), New Mexico ($478,343), Ohio ($191,051), Pennsylvania ($332,955), Virginia ($309,070) and Wisconsin ($231,044).
- In total, 13 U.S. markets exceed the $1 million average price for the surveyed home. Joining Greenwich and Boston on that list outside of California is Wellesley, Mass. ($1.2 million).
- The Northeast Corridor (from Maine to Washington, D.C.) and California dominate all but five of the most expensive “top 40″ U.S. markets slots - with just one town from those regions (Augusta, Maine) appearing among the top 40 most affordable markets. Texas, led by Arlington, has six of the study’s 40 most affordable markets.
- Canada mirrors the U.S. in that its costliest markets are primarily situated on the West Coast. Vancouver, British Columbia, tops the Canadian list, with comparable four-bedroom homes averaging $1,257,000 U.S. dollars. The most affordable studied market in Canada is Charlottetown, Prince Edward Island ($157,000). The price difference between Vancouver and Charlottetown is a stunning $1,100,000.
- Dubai is the most expensive market studied outside of North America, where an HPCI subject home averages $2.45 million U.S. dollars, 33% higher than La Jolla. Coldwell Banker charts a total of 15 markets outside of the U.S. averaging more than $1 million, including Bucuresti, Romania ($1.9 million) and Madrid, Spain ($1.7 million). Quito, Ecuador, ($96,750) is the most affordable foreign market included in the survey. Nine markets altogether average less than $200,000 including Guayaquil and Samborondo, Ecuador.

8:43 AM - Oct. 19, 2008 - comments {0} - post comment

Grocery Shopping Tips

With food prices still soaring, supermarkets are offering many deals and specials to lure in food shoppers. But sometimes, these good deals can actually cause people to spend more than they would have otherwise. Phil Lempert, author of Being the Shopper: Understanding the Buyer's Choice, offers these smart-shopping tips:

Limit Four Per Person: Scarcity can have a powerful impact on shoppers. A buying restriction can tempt people to buy more than they need, which could cause items to either spoil or sit in your pantry for a long time. Tip: In the long run, when you factor in the amount of products that spoil or are eventually thrown away, you will usually be better off financially if you only buy the amount you reasonably need and can use.

End of Aisle or Freestanding Displays: Often the "specials" displayed on the end caps of each aisle or on an island display aren't really the best deals that the store currently offers. These displays may also lead to impulse buys that you weren't intending to make. For instance, a display with graham crackers, chocolate, and marshmallows could make you think, "I'll make s'mores for dessert." Tip: While the location of these items is convenient, especially during busy shopping hours, you should only buy these items if they really are good deals.

Buy One, Get One Free: While these deals can make you feel like you are getting something for half price, if the cost is more than that of a similar item...or if you don't need a large quantity...than this may be one special worth passing on. Tip: Ask the manager if you can buy one item for half the price instead of buy one get one free. While stores don't always advertise this alternative, they often allow it.

Pre-Sliced Produce: While pre-sliced produce can feel like an easy choice, it can cost twice as much as whole produce, and can spoil faster than whole produce. Tip: Pay extra for prepared meals and produce only if the time and effort they save you is significant and really worth it.

For more great grocery shopping tips, visit www.supermarketguru.com.

11:53 AM - Oct. 17, 2008 - comments {0} - post comment

"Must have" upgrades

It’s a simple formula: upgrades = sold. For a home to sell quickly and for the price desired, it must be “finished” with as many structural and interior design upgrades as possible-and nothing’s too small to leverage in establishing a home’s price point.

From crown molding to faux painting to door handles and cabinet handles/knobs with modern finishes, to more obvious upgrades such as appliances, window, counter, cabinet and floor treatments, to swimming pools and surround sound wiring-any functional or beautification enhancement to a home are considerations in establishing its true value and strategic sale price.

Consider these property value-enhancing upgrade ideas from Robert Jenson, CEO of luxury Las Vegas real estate purveyor The Jenson Group:

–Commercial grade appliances such as Viking or Wolf in a kitchen, along with dual appliances such as ovens, dishwashers, refrigerators and freezers, add greatly to resale value and are always a desirable upgrade.

–The “outdoor living room” concept is extremely popular right now. Whether a palapa, gazebo or other covered section, an outdoor furnished lounge area complete with wiring for lighting, fans, TV and surround sound, fire pit/fire place, and built in BBQ grill will add tremendous appeal - water features will take this asset to the next level.

–Other custom upgrades and finishing such as front entry (or panty) doors with decorative glass inlays, decorative wrought iron stairway balusters, and faux painting treatments will readily set a home apart from the pack…particularly a track home in a master planned community.

–Fixtures should be considered even beyond the kitchen and bath. Door handles, for example, with modern finishes such as brushed nickel, are a great way to add custom appeal to an interior.

–Granite countertops need not be reserved for the kitchen. Master bathrooms in particular, if not all baths in the house, should utilize some kind of stone counter - marble, granite, travertine, etc. - for a particularly notable enhancement that is sure to differentiate a home from others on the market.

11:49 AM - Oct. 15, 2008 - comments {0} - post comment

Selling that car

Getting rid of a vehicle isn't always as easy as it seems. Problems can include everything from being locked in to an ironclad car lease to the inability to sell it for a fair price. Throw in any of the reasons for wanting to dump the car in the first place and what you have is a recipe for a potentially long and frustrating process. Follow along as we explore a few of the options, including some you may not have realized.

Getting out of a car lease
Car leases can pose many advantages for consumers. Typically speaking, lease payments are much lower than payments on a car note, thus allowing a consumer to lease a vehicle that he or she couldn't afford to actually buy. Many people also like the idea of avoiding major repairs by handing back their car after a predetermined amount of years.

While the list of positives doesn't stop there, car leases also carry a few negatives. One such negative is known as a "No Cooling Off" period. Once you sign the paperwork and drive the car off the lot, you have officially entered into a binding contract. There are some consumer laws that allow for a remorse period on major purchases, but automobiles are generally not included. Unless your dealership has broken the law or has leased you a lemon, chances are you are stuck with the terms of your car lease.

So, let's say that shortly after signing on the dotted line for that high-end luxury car, your financial situation changes for the worse and you can no longer afford it. Or, the opposite happens and you find yourself longing for an upgrade. One option is something known as an "early termination" of the lease. The problem with early termination, however, is that it can be costly, very costly. Aside from paying off the amount owed on the lease, there can also be penalty fees and other miscellaneous charges padded into the contract.

Another option is to sell your leased car privately. The problems with this option are that it requires a lot of hard work on your part and it only benefits consumers with cars that have an equal or greater value than their current "buy out" price.

There is one more option for getting out of your car lease and it happens to be the best one for most people. It is something known as a "lease transfer" and the process is just as it sounds. A leaseholder finds someone who is not only credit-worthy, but also willing to assume his or her car lease. Once the terms are negotiated and ratified the remainder of the lease is transferred into the new leaseholder's name.

If a lease transfer sounds like a complicated process, it's because it can be. The good news, however, is that thanks to websites like www.leasetrader.com and www.swapalease.com the lease transfer process has been fully explained and streamlined. These companies basically act as middlemen between the buyer and the seller, providing a forum for listings, as well as hands-on help with expediting the process.

It is important to know that the aforementioned websites as well as most car leasing companies will charge a fee for a car lease transfer. However, assumption of these fees can be negotiated between the buyer and the seller. They are also much less costly than the fees associated with terminating your lease early.

Whatever you do, avoid relinquishing the car to the dealer and abandoning the lease altogether. Doing so will most likely show up as a repossession on your credit report.

Selling a car that you have purchased
If you've purchased a car you either own it outright, or you are making payments to a lender. No matter the situation, you may have reasons for selling your car similar to those for wanting to get out of a lease. If this is your desire you have several options.

The first is to sell your car privately. This option is many times the one that yields the greatest financial return. You should note, however, that it also requires the utmost diligence on the part of the seller. Proper pricing and marketing of the car is completely up to you. The same also applies to the transferring of the title. If this is the route you decide to take, be sure to check the laws and procedures for selling a car in the state where you live.

Your next option in this situation is to trade the car in to a dealer as part of payment for a new vehicle, provided that your goal is to obtain another vehicle. While this will most likely be the easiest method for "selling" your car, there's a good chance it will not be very lucrative.

Trade-in values for any car are usually on the low side of its worth. At the same time, car dealers also like to mix the trade-in price into the negotiations for your new car. This procedure can make it difficult to figure out the actual amount of money you're getting for the vehicle. We recommend that you always negotiate the price of your trade-in separately from the negotiation for your purchase.

Another option for selling your car comes in the form a company known as CarMax. Operating in the manner of a car dealership, CarMax buys and sells used cars to the public. The main difference is that with both transactions there is no haggling over the price.

When you bring your car into a CarMax looking to sell it, the process starts with a complete vehicle inspection as well as a test drive performed by the company's buyers. At that point you are made an offer that is valid for seven days at any CarMax store, allowing you the opportunity to think it over while exploring other options. An added perk here is that CarMax guarantees to make an offer on your car even if you have no plans to purchase a car from them.

If you decide to sell your car to the company, bring your car along with the CarMax offer, any other paperwork concerning the vehicle, and all sets of keys into any CarMax dealer. They take care of the rest. If a payoff is involved, CarMax contacts the finance company and then issues a bank draft for the difference. If there is negative equity in the car you're selling, CarMax will accept a cashier's check or certified check from you and then pay off the lender.

Selling your car to CarMax may not bring you as big of a return as selling it privately, but when you consider the speed and ease of the transaction it quickly becomes a very good deal. By logging on to www.carmax.com you can find out more about the company and what they offer, as well as if they have a storefront near you.

Donating your car to charity
This has become a very popular practice within the last decade. Instead of selling your car for money you donate the vehicle to a charity in exchange for a deduction on your taxes. For older vehicles in need of repair, it can many times be a better option with much less hassle. It also has the potential to benefit those in need. The problem, however, is that all charities are not created equally. The following are some of the pitfalls as well as tips for staying clear of them.

1. Make sure the charity accepts vehicle donations directly
Many charities utilize companies that act as middlemen in the process. In these situations, the companies keep a percentage of the donation as payment for their role. Sometimes their cut is quite high, so do your homework before deciding on a charity.

2. Drive your car to the charity as opposed to having them pick it up
Hiring a service or a tow truck to claim the donation will cut into the amount of money your charity ultimately receives.

3. Make sure your charity has 501(c)(3) status
If your intended charity doesn't have this type of status, your donation will most likely not be tax deductible.

4. Understand how your deduction is valued
According to new tax laws meant to keep people from inflating the monetary amount of their contribution, your deduction is based on the price the car is sold for by the charity.

5. Sign over your car to the charity
If a charity asks you to not assign ownership you should go elsewhere. The problem is that if you do not transfer the title, the car is legally still yours. Think about the liability issue this presents.

6. Get a receipt after the car is sold
It's a worthy point that requires no explanation.

7. Consult your accountant first
You should initially consult your accountant for the purpose of determining if this is a good option for you. If you proceed with the donation he or she can also be of help regarding what to do if the charity decides to keep your car for its own use, or sells it at a discounted price. And don't forget: for any car that is sold for over $500 there is an extra form that needs to accompany your yearly taxes.

1:12 PM - Oct. 13, 2008 - comments {0} - post comment

Loan modification instead of foreclosure

The pathways to foreclosure are varied and numerous, especially in today's tougher economy. Increasing mortgage payments or mounting credit card debt, a sudden loss in income or employment, a serious illness, or a divorce or separation are all unexpected changes that can quickly lead to delinquency and even foreclosure.

And whether or not you personally are having trouble with your mortgage, it doesn't matter, because foreclosures affect everyone. After all, a single foreclosure in your neighborhood will often lower the value of every home – including yours – even if you've never missed a single payment.

The good news is that there is hope for you or anyone you know who might be on one of these unfortunate paths.

Lenders Really Don't Want to Foreclose
It's important to understand that lenders are not in the business of owning real estate, and would much rather help a struggling homeowner than to take possession of their home.

The numbers speak for themselves.

The average loss incurred by a mortgage company on a foreclosure is approximately 40%. In comparison, the average loss on a modification of the mortgage is approximately 20%.

With this in mind, let's say a $200,000 mortgage is facing foreclosure. A mortgage lender can expect a loss in the area of $80,000. Compare this to just the $40,000 loss it can expect by working something out with the homeowner. Multiply these numbers by hundreds or even thousands of delinquent loans, and it becomes clear why working with homeowners is in a mortgage lender's best interest – especially in today's challenging market where foreclosures are reaching record levels in some areas.

RealtyTrac®, a company that tracks foreclosure statistics, recently reported that bank–owned inventory hit the three–quarter million mark in July. Bank repossessions have increased 184% since last year at this time as default and auction notices continue to climb.

In the second quarter of this year, 1 in every 171 households nationally reportedly received a foreclosure filing. While the majority of the fallout is limited to states like Nevada, California, and Florida, states from the Midwest and Sun Belt have not been exempt. In fact, add in foreclosures from states like Michigan, Ohio, and Arizona, and the number of homes in foreclosure increases to as many as 1 in every 43 homes.

With staggering numbers like these, it's easy to understand why mortgage lenders are so willing to work with homeowners right now to save their homes through loan modifications. 

Why Should a Homeowner Try to Modify?
Just because someone missed his or her last three mortgage payments, triggering the foreclosure process, doesn't mean that it is necessarily time to start packing up and moving out. As we mentioned earlier, the reasons borrowers may miss a few payments are valid and often understandable. More importantly, not all of the unfortunate scenarios that lead to missed payments are permanent or irreversible. People can and do get back on track very quickly – and lenders know this and, now more than ever, are willing to help these homeowners avoid foreclosure.

According to Hope Now, a non–profit company helping distressed homeowners, mortgage servicing companies have successfully negotiated 522,000 workouts in the second quarter of 2008. In the month of June alone, approximately 76,000 of 105,000 homeowners received loan modifications. With so much on the line, homeowners in financial distress need to be proactive and make every attempt to help themselves.

Remember, with a foreclosure on your record, under most circumstances you will not be able to buy another home with a conforming mortgage for five years. Not to mention the lost opportunities of being a homeowner, which include increased wealth through home price appreciation and decreased income tax liability from deducting mortgage interest and property taxes.

If you or someone you know is facing financial challenges and can't pay the mortgage right now, don't just bury your head in the sand. The first thing you need to do is reach out to your mortgage company right away.

What Should You Do?
For a homeowner to be considered for a loan modification, the lender will want to know exactly where you stand financially and what you can afford.

The first thing to do is to find the courage to pick up the phone and call someone for help. Picking up the phone may not be easy, but if you want to avoid the financial ramifications of a foreclosure, you have to do it.

There are three calls you should make right away. The first call could be to the existing servicing company for the mortgage. The second option could be to a non–profit company like Hope Now. The third would be to contact a company that negotiates loan modifications. Either way, for direction on the best path to take, contacting an experienced mortgage professional is also a good idea.

Once you have made contact, let the company know that you would like to stay in the home. Assure them that you are committed to honoring your mortgage, but that you are in need of a little assistance right now to get back on your feet.

To enter into a modification agreement, the company will need to know, in writing, exactly what caused your sudden financial distress – so be prepared to tell your story in writing. This is also known as a "hardship letter," which will clearly explain the circumstances behind your missed payments and justify why you're in a good position to continue to make your modified payments in the future.

Be advised, investors or property flippers who were simply caught in a falling real estate market are not usually considered hardship cases. These homeowners may not find the same willingness to help that lenders will offer someone whose home in question is his or her primary residence. That means your chances are much better if you live in the home that you're trying to save.

Next, you will need to provide detailed financial information to help prove your case, so be prepared once you make that call to provide this information. Documents may include pay stubs, income tax returns, W–2s, liquid assets (bank and brokerage accounts), and current expenses (food, utilities, insurance, and other common expenses).

With this information, a lender may be willing to offer assistance in the form of a mortgage modification. This could include a reduction of your interest rate, a reduction of your principal, or even an extension of your existing mortgage. A combination of these options could also be in the mix, depending on your situation. Remember, the goal of a loan modification is to keep the homeowner in the home, so be open and up front and willing to help this process along in any way that you can.

Another Option for Struggling Homeowners
New legislation was put in place recently that could also assist homeowners whose mortgage balance is higher than the current value of the home – also known as being "upside down" or "under water." The bill is called the Homeowner Recovery Act of 2008, and it goes into effect October 1, 2008.

This law has provisions that will allow qualified homeowners to refinance their mortgage, with the mortgage company's approval, at 90% of the newly appraised value. There is one catch, though. To take advantage, the homeowner will have to share in future appreciation with the government. While some may be reluctant to do so, this could be an outstanding option for many homeowners who want to avoid foreclosure and keep their homes.

1:08 PM - Oct. 11, 2008 - comments {0} - post comment

Affordable travel is still possible

Be sure to consider the timing and destination when planning your trip. On-season and off-season travel can require very different budget challenges. So consider these practical suggestions as you decide when and where to go on your next vacation. You’ll get the most out of your trip and your dollar according to Budget Car Rental Services.

Think about traveling during the off-season

• Beautiful weather is not the most important part of visiting many cities. In some cities, the greatest attractions include breath-taking artwork, stunning cathedrals and mouth-watering food-and all of those things are enjoyed in the comfort of the indoors.

• If you love taking summer vacations, keep in mind that our northern hemisphere “summer months” are the southern hemisphere “off season” months. Getting there can be a little expensive, but once you arrive you’ll find some very economical prices.

• Don’t assume it’s too hot or too cold until you research the weather. Many cities have weather that’s much more temperate than you think. Tourist traffic goes down and so do many prices.

Getting the most out of peak-season travel

• Fully consider the benefits of traveling during peak season. Some cities take full advantage of the weather. They offer free or very affordable street festivals and outdoor activities that add value to your vacation.

• Think about the timing of your visit. Later in the season you can often find some great deals. You still might be, technically, traveling during peak season but shopkeepers and innkeepers still want to keep sales high and rooms full.

• Consider staying somewhere near your destination that’s less affected by seasonal rate increases. Whether you’re staying the countryside and visiting the city or staying in the valley and visiting the slopes, it’s kind of like two vacations in one.

Consider these on-season and off-season destinations for special seasonal value:

Spring

Amsterdam
Los Angeles
London
Grand Canyon

Summer

Buenos Aires
Rio de Janeiro
Miami
Santa Fe

Fall

Detroit
Seoul
Paris
Berlin

Winter

Venice
Florence
San Francisco
Munich

1:01 PM - Oct. 9, 2008 - comments {0} - post comment

HOPE for homeowners

This week, the Bush Administration unveiled additional mortgage assistance for homeowners at risk of foreclosure. The HOPE for Homeowners Program will refinance mortgages for borrowers who are having difficulty making their payments, but can afford a new loan insured by HUD’s Federal Housing Administration (FHA).

“For families struggling to keep up with their mortgage payments, this program will be another resource to refinance into a loan they can afford,” said HUD Secretary Steve Preston. “FHA remains a safe and affordable alternative to the high-priced mortgage loans that threaten homeowners’ ability to retain their homes. We strongly encourage borrowers to work with their lenders to determine if HOPE for Homeowners is the right program for them.”

The HOPE for Homeowners program was authorized by the Economic and Housing Recovery Act of 2008. Since the President signed this vital legislation into law on July 30, 2008, the HOPE for Homeowners Board of Directors has worked diligently to develop and implement the program as directed by Congress. The Board was charged with establishing underwriting standards to ensure borrowers, after any write-down in principal, have a reasonable ability to repay their new FHA-insured mortgage.

The HOPE for Homeowners program ends September 30, 2011. The program is available only to owner occupants and will offer 30-year fixed rate mortgages - so the borrower’s last payment will be the same as the first payment. In many cases, to avoid what would be an even costlier foreclosure, banks will have to write down the existing mortgage to 90% of the new appraised value of the home.

Borrower Eligibility

Borrowers are encouraged to contact their lender to determine eligibility, but may be eligible if, among other factors:

- The home is their primary residence, and they have no ownership interest in any other residential property, such as second homes.
- Their existing mortgage was originated on or before January 1, 2008, and they have made at least six payments.
- They are not able to pay their existing mortgage without help.
- As of March 2008, their total monthly mortgage payments due were more than 31% of their gross monthly income.
- They certify they have not been convicted of fraud in the past 10 years, intentionally defaulted on debts, and did not knowingly or willingly provide material false information to obtain their existing mortgage(s).

How the HOPE for Homeowners program works

“HOPE for Homeowners will add to HUD’s existing efforts to make FHA refinancing available to homeowners who need it most,” said FHA Commissioner Brian D. Montgomery. “One year ago, FHA expanded refinancing into its FHASecure program. Since that time, we have helped more than 360,000 families keep their homes by refinancing with FHA, and we will assist a total of 500,000 families by the end of this year.”

The board expects that the primary way homeowners will participate in the program is by working with their current lender. HOPE for Homeowners will serve as another loss mitigation tool available to distressed borrowers.

HOPE for Homeowners also includes the following provisions:

- The loan amount may not exceed a maximum of $550,440.
- The new mortgage will be no more than 90% of the new appraised value including any financed Upfront Mortgage Insurance Premium.
- The Upfront Mortgage Insurance Premium is 3% and the Annual Mortgage Insurance Premium is 1.5%.
- The holders of existing mortgage liens must waive all prepayment penalties and late payment fees.
- The existing first mortgage must accept the proceeds of the HOPE for Homeowners loan as full settlement of all outstanding indebtedness.
- Existing subordinate lenders must release their outstanding mortgage liens.

Standard FHA policy regarding closing costs applies, and they may be:

- Financed into the new loan provided the value of the mortgage (including the Upfront Mortgage Insurance Premium) does not exceed 90% of the new appraised value of the home.
- Paid from the borrowers’ own assets.
- Paid by the servicing lender or third party (e.g., federal, state, or local program).
- Paid by the originating lender through premium pricing.
- The borrower must agree to share with FHA both the equity created at the beginning of this new mortgage and any future appreciation in the value of the home.
- The borrower cannot take out a second mortgage for the first five years of the loan, except under certain circumstances for emergency repairs.

The lender will disclose to the homeowner the benefits of the program including home retention, a new affordable mortgage based on the current appraised value, and 10% equity. The lender will also explain the prohibition against new junior liens against the property unless directly related to property maintenance, and a minimum of 50% equity and appreciation sharing with the Federal government.

The costs to the homeowner include the upfront and annual insurance premiums, as well as a share of the equity created by the write-down associated with the HOPE for Homeowners mortgage and any future appreciation in the value of the home. At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD’s appreciation share.

If the home is sold or refinanced, the homeowner will share the equity with FHA on a sliding scale ranging from a 100% FHA share after the first year to a minimum of 50% after five years. The lien holder that previously held the highest priority will receive payment up to a proportion of its original interest, not to exceed the amount of available appreciation. This type of delayed payoff will take place until all prior lien holders are satisfied or the amount of available appreciation is exhausted. All remaining appreciation is remitted to FHA.

3:50 PM - Oct. 8, 2008 - comments {0} - post comment

Real Estate Negotiating Tips

This article is by Curtis Seltzer iwho s a land consultant working with both with buyers and investors. He is author of How To Be a DIRT-SMART Buyer of Country Property available at www.curtis-seltzer.com where his columns are posted.

A few individuals love negotiating over property. Others prefer it to back pain but not by much. Most consider it another one of the endless, necessary miseries of adulthood.

I’ve found that negotiating is easier when I can figure out which one of four buyer-seller bargaining relationships I’m in. The four are: 1) both sides are motivated to make a deal; 2) both sides are not highly motivated, but willing; 3) buyer is motivated, seller is not; and 4) seller is motivated, buyer is not.

Price changes motivation. A better offer will move an indifferent seller, just as a lowered price will help a kick-the-tires-type buyer.

I’ve found that non-price factors-terms, seller-financing, upfront financing costs, irremediable negatives, sweeteners and so on-can be as important as price. Lack of physical or legal access, for instance, will stop a land deal, no matter how cheap the price.

A seller stuck on a price can sometimes be jiggled off it by making a point lightly: “I’ll meet your price, if you meet my terms.”

In a buyer’s market where credit is tight and sales are slow, desperate sellers may find themselves in such a bad bind that it’s better for them to accept the pain of continuing to hold out rather than accept a low-ball offer that is predictably ruinous. Low-ball buyers cannot assume that pressured sellers are without options that feel slightly better, even though they’re pretty bad.

I’ve seen back-to-the-wall sellers reject insultingly low offers out of pride.

If you hate to haggle, you’re probably not very good at it. Doing a good job for yourself is partly about the attitude and confidence you bring to the table.

You can build confidence through preparation and research. Buyers need to know as much as possible about the property, their sellers and their own objectives and resources.

Successful bargaining is also about civility. Gloating, belittling and end-zone dancing are what little kids and professional athletes of the same age do. Issues in negotiations are problems to be solved, not platforms to show that you’re smarter than the other side. It’s much easier to concede a point to someone you’re okay with than to someone you loathe.

And then there’s fair play. I know an FSBO seller who rejected three full-price offers from a buyer, each $100,000 higher than its predecessor, because he knew the buyer would go higher. Some think that’s admirable negotiating; I don’t.

Where brokers are orchestrating a sale, a buyer can request face-to-face negotiation with the seller during which the buyer can directly present an offer. Large real-estate deals are often handled this way.

Certain buyers will do better for themselves by allowing the broker to present an offer; others will be disadvantaged. The rule is: it depends on the personalities.

I’ve generally found that it helps both sides to negotiate directly, face to face. It’s the best way to get a sense of the other side.

If you feel uncomfortable negotiating for yourself, negotiation helpers are available to provide counsel.

Whether buyer or seller, you’re looking for a helper who is experienced in negotiating, knowledgeable about the issues that will be raised and, ideally, is not invested in your sale, either emotionally or financially.

Your local lawyer. Good real-estate lawyers help their clients enormously.

Nitwits and the obnoxious don’t. Negotiating is a different skill than advocacy; not all lawyers understand the difference.

If you’re an out-of-town buyer, you may help yourself by letting your local lawyer negotiate with a local seller. Ask whether this is ethically or socially awkward for your lawyer; if so, don’t make the request.

A mediator-consultant. Trained mediators are skilled in getting parties to reach compromise agreements. A mediator-consultant who is hired by one side can be invaluable in finding common ground.

Brokers or agents acting as outside consultants. All brokers and agents who are involved in a deal are financially invested in getting an agreement. While agents are expected to represent the best interests of their clients in negotiations, it’s not unknown for deals to be encouraged because of self-interested commission hunger.

A buyer could consider hiring a broker or an agent as a negotiating consultant, paid by the hour. The broker/agent-consultant is not part of the deal and would not share in the commission split. As an outside and independent consultant, the broker/agent would provide advice unrelated to having his reward be contingent on a purchase.

Brokers and agents. Where buyers and sellers are represented by brokers and agents who always put their clients’ interests above their own, buyers and sellers can place faith in their advice. Where buyers and sellers do not have that feeling about those who represent them, their advice is always a little suspect.

Good brokers and agents have figured out how to keep their own pocketbooks out of negotiations; bad ones don’t even try.

Professional negotiator. If you’re in face-to-face negotiations, you might consider hiring a pro.

Steven Cohen, author of “Negotiating Skills for Managers,” is president of The Negotiation Skills Company near Boston (www.negotiationskills.com). His staff of professional negotiators is available to buyers or sellers for coaching and handholding in person or by phone. “Real estate,” he told me, “is all about negotiation,” which he describes as a “live tool for collaboratively solving problems.”

Another negotiator provider is www.consensusgroup.com. Michael Rosenthal, president, said his negotiators can train clients in strategy and preparation through online materials and role playing. The fee for e-mail and/or phone consultations is $400 to $500 per hour.

Professors. A local college or university may have a knowledgeable faculty member. Avoid the theoreticians and the games-strategists-they’re overkill for real-estate deals. You’re looking for practical help, down in the trenches. Check references.

With the exception of lawyers, negotiator consultants must not negotiate on behalf of their clients as their agents. State laws governing the practice of real estate prohibit non-agents from doing so. A buyer can, of course, purchase whatever advice and information from a consultant that is desired outside of the commission framework.

Spouses. Some couples can take different roles in a negotiation and carry it off without marital meltdowns. Tag-team spousal negotiating is freer of consequences when the couple wins. Losses tend to beget statements like, “How could you be so stupid!”

I’ve seen spousal tag teams adopt different models: accelerator-brake; acceptable price-higher price (seller side); acceptable price-lower price (buyer side); and Mr. Reasonable with Designated Dingbat. Ms. Dingbat’s role was to crazy up the negotiations just enough to unsettle the sellers and have them focus on dealing with her “irrational” demands and Joan Rivers personality. She was brilliant.

The negotiating advice that always applies is to act reasonably and don’t personalize negotiations.

12:50 PM - Oct. 7, 2008 - comments {0} - post comment

Let your house be personal - to you

This article is by Melissa Birdsong whoi is vice president for Trend, Design & Brand, Lowe’s Companies, Inc

Buying a house is the first step; after the move, it’s about making it your home, with personal expressions and affordable, easy-to-execute upgrades.

When I moved into a new home a few years ago-a spec home finished with safe, neutral-and-marketable décor-I was happy to be there but soon realized that I had some work to do to add character to my new spaces. When it comes to home décor, a just-purchased home falls into two camps: new but somewhat benign, like mine; or older and in need of updating and refreshing. With a new house, simple changes such as more expressive color, more unique lighting or window treatments may be all that is needed. If the home is older, there may be some serious “un-decorating” to do before the re-decorating begins. Either way, to avoid a random approach and also create the most impact, I usually organize the first level of planning around a few basic themes: colors, finishes and lighting.

Colors and finishes are the first two keys to unlocking the door to personalization. Creating a coordinated palette is one of the most cost effective and efficient ways to personalize a home because it also provides a map for planning everything else. When selecting colors, it’s important to consider wood and metal finishes as part of the palette, too. For example, wood tones may have yellow and orange, red or pink tones. Metal finishes range from warm, dark tones like oil-rubbed bronze to cool, light tones like brushed nickel. Considering the compatibility among all the elements as well as the contrast between them is the best way to achieve the look and feel you want.

The third-and I believe one of the most underrated decorating tools-is lighting. The right combination of lighting reveals unexpected possibilities for creating ambiance in your home. I often speak about “layering” lighting, which is combining general, task and accent lighting wired with dimmers to allow flexibility in light levels. The same room takes on a completely different mood under bright, overhead lighting versus when softly washed with accent lighting. And because colors and finishes appear differently in natural light vs. incandescent vs. different types of fluorescent and LEDs, it’s important to view them under all conditions.

Turning a house into a home that reflects a homeowner’s personality is a journey that can take time, but it all begins with the first few steps. By focusing on these three basic areas with a few doable and affordable projects, much progress can be made within the first few weeks. And achieving early successes will yield long-term results in satisfaction and feeling good about finally being home again.

12:45 PM - Oct. 5, 2008 - comments {0} - post comment

Gas Saving Myths

There are real tips for saving gas, such as obeying the speed limit and not leaving your car to idle. But with gas prices at record highs, the best advice is to avoid the gas-savings myths that really don't pay off. Here are just a few:

Fill up Your Gas Tank in the Morning - The theory is that fluids are denser at lower temperatures, so a gallon of cold gas actually has more gas molecules than a gallon of warmer gas. This may be true, but the temperature of gas that comes out of the nozzle hardly varies at all throughout the day, even if it's 100 degrees outside.

Certain Products Boost Fuel Efficiency - There are many products in the market today that claim to boost your fuel efficiency. If this sounds too good to be true, that's because it is. The EPA tested 100 different products with the same promises and only a handful of them worked. However, "Even for the few that work," says the Federal Trade Commission, " the gas savings was so small it didn't justify the price."

Use Premium Fuel only - A lot of drivers think that because their owner's manual recommends premium fuel, it is necessary and more fuel efficient. This is not the case, and most drivers can get away with using regular fuel. If your car is running properly and your owner manual does not require premium, you will not decrease your MPG with regular gas.

Don't Sweat the A/C - Air condition makes your engine work harder, thus using up more fuel, right? Yes, says the EPA. But, because of the technology today, using the A/C will only drop the MPG by about a mile a gallon.

And just for grins, here are the best and worst.  We'd still go for the Lamborghini - bad gas mileage or not!

According to the Department of Energy, the following are currently the most-fuel efficient cars:

1. Toyota Prius City: 48 HWY: 45;
2. Honda Civic Hybrid City: 40 HWY: 45;
3. Smart Convertible City: 33 HWY: 41;
4. Toyota Yaris City: 29 HWY: 36;
5. Mini Cooper (Manual) City: 28 HWY: 37;
6. Toyota Corolla City: 28 HWY: 37;
7. Honda Fit City: 28 HWY: 34;
8. Nissan Versa City: 26 HWY: 31.

And just for fun, here are the least efficient:

1. Lamborghini Mucielago City: 8 HWY: 13;
2. Bentley Azure City: 9 HWY: 15;
3. Bentley Arnage RL City: 9 HWY: 15;
4. Ferrari 612 Scaglietti City: 9 HWY: 16;
5. Aston Martin DB9 City: 10 HWY: 16;
6. Bentley Continental GTC City: 10 HWY: 17;
7. Mercedes Benz E63 AMG City: 12 HWY: 18;
8. Audi S4 Avant City: 13 HWY: 20.

6:25 PM - Oct. 3, 2008 - comments {0} - post comment

New Housing Act affects Seniors

This article by Frank N. Darras, one of the nation’s leading disability and Long-Term Care insurance lawyers explains show the new Housing and Recovery Act can affect seniors.

The Housing and Recovery Act of 2008 is going to affect more than first time home buyers, it will affect seniors too. When the President signed into law a $300 billion housing bill to help homeowners renegotiate their mortgages, reverse mortgage lenders reignited their marketing programs focusing on seniors.

Here is what Seniors need to know:

The increasingly popular reverse mortgage has been shopped by lenders and targeted at homeowners over 62. The intrigue of such mortgages has been that as you age, you can have “your house pay you.” The convincing argument is that reverse mortgages can be used to pay for living expenses, prescription drugs, health care, or to pay off an existing mortgage.

Today’s reverse mortgages are called Home Equity Conversion Mortgages (HECMs) and are insured by the Federal Housing Administration. HECMs allows folks to tap home equity and not have to make monthly payments. The HECM has been limited to the value reflected in a home’s appraisal, the range and loan limits recently were between $200,160 and $362,790, depending on the location of the home.

That is going to change, according to Darras. The new bill is intended to significantly increase the amount a borrower can get and lenders are dangling a golden carrot with phrases like “Seniors may be able to borrow as much as $625K in home equity to use any way they please!” Keep in mind that the amount of your loan will depend on the home’s value, location, interest rates and the age of the youngest borrower on the note.

“Be very careful,” says Darras. “Rising costs on a fixed income can be a dangerous combination. Don’t let fear and the lure of an easy solution drive your decision. The new legislation is promising to make it less expensive to borrow but it can cost you in the long run, if you are not careful.”

At first glance, it sounds pretty terrific, says Darras. But remember, even though the loan will come due only when you die, sell or move away permanently, it will have to be repaid somehow. Are you setting up a financial disaster that could wipe out your life’s savings, your estate and leave heirs with financial obligations they cannot meet?

Darras recommends that you get straight answers from a financial planner you trust. Most importantly, only deal with lenders and companies you recognize and do your due diligence. If you are not sure about taking out that reverse mortgage, wait until the new law comes into affect in October and more protections are in place to protect you.

These days, the rest of your life can be 30-40 years, so make your decisions carefully, regardless of great marketing, fancy brochures and short-term fixes.

6:16 PM - Oct. 1, 2008 - comments {0} - post comment

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