Queercents

Ever been stuck at a cocktail party with a blowhard who’s leaning in a little too close? Just launch into a monologue on the relative merits of title insurance and even the most booze-fogged windbag will go running for cover.

Title insurance. How boring.

How boring, indeed, until two days before closing on the purchase of your first home, and your attorney calls saying that your mortgage has been approved, the former tenants were removed by the sheriff, the radon’s been remediated, and oh, by the way, do you want title insurance? “Huh?”, you say. “What tenants? I thought those were the owners? And what was that about insurance?”

What is Title Insurance?

Title insurance protects you in case there’s a problem with the title to the property. Problems happen when ownership of the property is not clear, when there is fraud or forgery, or (most commonly) due to simple clerical mistakes. Read the rest of this entry »

Mortgage rates continue rising at a much faster than expected pace, and that has put many homeowners into a quandary regarding whether or not to go through with refinance plans. Some lucky homeowners snagged rates as low as 4.65 percent in April and May, as extremely affordable mortgages inspired a tremendous surge in new home loan applications as well as mortgage refinances. But then interest rates on 30-year fixed-rate mortgages jumped nearly a percentage point within just two weeks between May and June, climbing from 5.0 percent to 5.79 percent. Now the big question on everyone’s mind is whether or not it is too late to take advantage of rates and save money by doing a refinance.

Here are some “refi” tips to help you decide:

• First calculate your closing costs with the help of a knowledgeable mortgage broker. Any reputable lender should be able to give you a rather close approximation, despite the fact that fees and costs may vary slightly from the original estimate.
• Be sure to figure in any incidental savings or costs such as tax deductions for mortgage interest or private mortgage insurance payments. If you can recoup the additional expenses within two years, it is probably a good idea to refinance because you’ll break even quickly and start saving money.
• Look for a rate that is at least one and a half to two percentage points lower than the current one. Those now paying seven percent or more are almost guaranteed savings, while homeowners with mortgage rates closer to 6.25 percent should crunch the numbers carefully, because they may be on the borderline. Read the rest of this entry »

Didja’ ever notice that how you measure something sometimes changes the outcome?

In the 1980’s CEO’s compensation changed from a salary-and-bonus plan to being directly tied to the stock price, and voila, stock prices rose. The companies weren’t necessarily managed any better, but since stock price was suddenly the important metric, it improved.

A similar effect can be seen in Massachusetts schools which are ranked by statewide tests (MCAS). An increase in the scores, doesn’t necessarily mean that the students are any smarter, but they are doing better at passing the exams, leading to much discussion about “teaching-to-the-test.”

Likewise, many financial advisors are paid by a percentage of assets under management. The rate is typically 0.5-2.0% per year, where the low end of that range is for account values north of $1M. If you have $200,000 in an advised account that charges 1.5%, you pay $3,000 per year for that advice.

Not only do I think that’s an awful lot of money, it isn’t judging the right metric. Sure, I want my investments to grow, but what I really want is my net worth to grow. Designing the advisory fee around just one aspect of your net worth focuses their activity around just your investment — typically brokerage — accounts. Read the rest of this entry »

In the Vanity Fair article about Fannie Mae’s Last Stand, the slang term “housers” was used to describe the Fannie people who believed that better housing is the cure to all of society’s ills.

Most housers were likely supportors of the ownership society; a model encouraged by George W. Bush that values personal responsibility, economic liberty, and the owning of property. Some would argue this was purely a political strategy. For example, see this article in The Nation:

Well before the ownership society had a neat label, its creation was central to the success of the right-wing economic revolution around the world. The idea was simple: if working-class people owned a small piece of the market–a home mortgage, a stock portfolio, a private pension–they would cease to identify as workers and start to see themselves as owners, with the same interests as their bosses. That meant they could vote for politicians promising to improve stock performance rather than job conditions. Class consciousness would be a relic.

While others (this article at Cato.org), define an ownership society in economic terms: Read the rest of this entry »

A few weeks ago I wrote about a study that said gays and lesbians spend more money on home repairs. I was full of questions – you can thank my statistics professor for my skepticism. Well, I got an e-mail this week from Matthew Tumminello of Target 10, the author of the study. Here’s what he had to say about the study . . .

You mentioned that the survey included responses that were only from the New York area but in fact it was fielded nationally. I agree that if the survey were limited geographically it would not be representative. We wanted to be sure to have rural, suburban and urban folk from every region of the country. We fielded the survey online and tried our best to get a good geographic cross section.

Regarding the sample size, determining the proper number of respondents is a complex process. That’s why we turned to a formal research company (Socratic Technologies) to help us with the methodology and science behind the survey. The total sample size was 611 and that is enough to produce results with 90 to 95 percent confidence levels. I can assure you that we took a very academic approach to the survey methodology and produced strong, valid numbers. If you talk to other researchers I think they’ll tell you that this was a strong sample size. Read the rest of this entry »

The summer of 2009 is shaping up to be an historical window of opportunity for buying fun and affordable vacation homes. Mortgage money is flowing again, interest rates on safe and secure fixed rate loans are extremely attractive, and the inventory of deeply discounted condos and houses in popular vacation destinations is ripe for the picking.

According to a recent article in the National Association of Realtors (NAR) publication Realtor Magazine, prices have dropped up to 50 percent in some of America’s top vacation home markets. But that does not mean that sales are in the doldrums. Buyers are starting to step in and make offers to purchase before the deals disappear and while mortgage rates still hover near historically low levels. Sales of beach homes in Daytona Beach, for instance, are up about 20 percent compared to this time last year, and that is based on statistics recorded before the peak of the summer selling season. In the month of March, for instance, sales of Daytona Beach condos were twice as brisk as they were in the previous month, and homes in the $200,000 to $400,000 range were moving the fastest.

Foreign nationals have also recognized the value of properties throughout the nation, especially in world-famous hotspots like Miami and South Beach. Buyers from other countries are responsible for about 10 percent of recent real estate purchases. That kind of eager buyer participation is giving the market for vacation homes added traction, and many economists expect that the lowest prices are already slipping away as real estate regains its footing. Read the rest of this entry »

Part 3 of 3: Buying A Home?

To close this series on housing I interviewed a woman named Ann Metzger. She is a practicing Real Estate Agent in southern California and she is very successful in her line of work. Although I initially asked Ann the following five questions I later thought that it would be interesting to add another professional’s perspective on the same questions, so I did. This ex-agent wanted to remain anonymous. For the purpose of presenting his answers below I refer to him as David. I met this tall and handsome gay man a few years ago and had been to his lovely home in Mission Viejo several times. I loved his backyard with the stunning views of the mountains in addition to the pool.

Unfortunately, David lost his home in this housing crisis and he is no longer a practicing Real Estate Agent—a career that once was lucrative for him for at least ten years. Due to his personal experience, David represents many Americans who have lost their home from the mortgage crisis that Martha previously shed light on in her role as an Eviction Coordinator (refer to part one of this three part series). While David’s view on home buying is quite different from Ann’s view it is a perspective that is certainly worthy of being heard, especially by people considering that BIG move to purchase a property. I hope readers appreciate the yin-yang angles that are presented below.

Lana: How has the fallen housing market affected your real estate business?
Ann: There was a lull and definitely a stall in my business from September 2008 through March 2009. I have seen many agents leave the industry, as they could not financially survive. In particular were those agents that had families and those agents that jumped into the business during the height of the market (Spring 2006) as they thought selling property was easy money.  Business has picked up dramatically for me and that seems to be the case for the industry in general. Read the rest of this entry »

I bought my first rental property seven years ago. When I was unable to get it rented those first couple of months, I started to panic and then my property manager asked if I’d consider renting to a tenant that participated in a government-subsidized program such as Section 8.

Section 8 (aka the Housing Choice Voucher Program) is a type of Federal assistance provided by HUD that helps provide subsidized housing for low-income families and individuals.

My first tenant ended up being a Section 8 tenant and lived in the property with her daughter and disabled grandson for nearly five years. She was never late paying her portion of the rent and of course, the government was never late paying its portion (which happened to be two-thirds of the total). I never had one complaint the entire time she lived there. The single family home was a new construction, so the only issue was minor repairs that were needed throughout the five years.

During that time, I purchased two more properties. These rentals had tenants that were not Section 8 and as the economy worsened over the past few years, I’ve had a challenge keeping these rented with people who could afford them. Read the rest of this entry »

How many of you have started summer gardens as a way to defray your family’s grocery costs? James had some great tips for container gardening back in February. And I had some ideas last Fall about stretching your food dollar by gardening. As we head into summer, many people have probably already planted their gardens and are smack dab in the middle of the maintenance phase. Here are a few things that can help you cut back on gardening-related expenses this summer. The whole goal was to reduce your food costs, right?

1. Collect gray water in a bucket. I have a 5 gallon bucket that stays in the kitchen sink. Whenever I wash my hands, rinse vegetables, or rinse off dishes, I collect the water and then take it outside to water the plants. It’s a little unbelievable how much water you can save this way. Just be sure that you’re using phosphate-free soap and you’ll be OK using the gray water on flowers or on vegetables. The soap even helps to keep the soil loose, especially in containers, where the soil can get packed down tight.

2. Mulch. Mulching helps the soil retain water, and it will help you do less weeding. Yard clippings and dried leaves are great sources of free mulch. You can even mulch with shredded paper from your office. Just make sure you put a light layer of soil over the paper so that it doesn’t blow away. Last year I didn’t mulch my containers – I only mulched the plants I had in the ground. This year I mulched everything, and my plants are so much happier, and I’m using a lot less water in the garden. I only have to water once a day instead of twice. Read the rest of this entry »

Part 2 of 3: Saving Your Home?

In part two of this three part series I spoke with a Loan Modification Officer who works in an office in Irvine, California. While she was eager to answer my questions her company wanted both her and their business name to remain unknown. We don’t know why that was the case. In any event, for people struggling with their mortgage and who are also heading toward foreclosure, Loan Modification may be the saving grace. A word of caution: Legitimate loan modification programs don’t take your money upfront; they charge you only after they have confirmed they can help you. Below is my interview with a Loan Modification Officer whom I have called Ingrid.

Lana: What is Loan Modification?
Ingrid: It is a NEW contract between the borrower and the lender modifying the original terms.

Lana: How does Loan Modification work?
Ingrid: The Mortgage Loan Modification process provides for either a permanent change in one or more of the terms of a borrower’s loan. This change allows a loan to be reinstated if the loan is behind or past due and results in a payment the borrower can realistically afford.

Areas of change can include:
1. Extending the length of the mortgage loan, as appropriate.
2. Reducing the mortgage loan interest rate.
3. Deferring a portion of the principal, which will require the borrower to make a balloon payment when the loan matures, is paid off, or is refinanced. Read the rest of this entry »