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When Neighbors Don't Seem to Care

Monday, June 4, 2018
by The Mike Parker Team

A home that isn't being maintained like others in the neighborhood can negatively affect your visual sense of appeal and in some extreme cases, even affect property values. It might be an overgrown yard, a fence in need of repair, excessive noise, unruly pets, paint peeling on the home or even a car or boat parked in front of the home that hasn't moved in weeks.2676519-250.jpg

Most people want to be good neighbors and may be willing to correct an issue once it is brought to their attention. A practical but possibly, confrontational solution is to contact the responsible person and describe your perception of the issue. However, they may not always agree with the same urgency and it might be necessary to seek other remedies.

An owner-occupant may be more sympathetic to the neighbors and willing to correct the issue. If you think the home might be a rental property, check with the county tax records to identify the owner. They may be unaware of the situation and welcome the notification to protect their investment.

Another alternative might be to notify the homeowner's association, if there is one. One of the benefits of a HOA is to enforce community appearance standards as set in the covenants or bylaws that specify how properties must be maintained. This could be a less personal method of reaching a beneficial outcome.

If the source of the problem is a code or housing violation, the city may be the ultimate authority. Most cities have a separate code and neighborhood services division and some cities have 311 for non-emergency assistance. 


The Reason They're Called Benefits

Tuesday, July 29, 2014
by The Mike Parker Team

 

 

The Veterans Administration guarantees home loans for eligible veterans.  It is considered an attractive loan because the veteran can purchase the home with no down payment up to specific loan limits and no mortgage insurance. This makes the monthly payment considerably lower.

Let’s assume a buyer wants to purchase a $200,000 home and can get a 4.5% interest mortgage for 30 years.

A FHA loan would require a $7,000 down payment plus $3,377.50 in up-front MIP which can be rolled into the mortgage. The monthly mortgage insurance premium would be $221 per month for a total payment of $1,215.94.

The VA loan doesn’t require a down payment. There is a 2% VA funding fee that can be rolled into the mortgage which would make the principal and interest payment on $204,400 much less at $1,035.66.

The revised loan limits for 2014 are published by VA and can change each year especially based on high-cost areas. However, a lender can allow a home purchase in excess of these amounts with a 25% down payment on the amount above the limit.

If a purchaser wants to buy a $600,000 home in an area where the VA limit is $417,000, the lender could require a $45,750 down payment and make a $554,250 mortgage. In this example, the purchaser is able to get in for less than 10% down payment and no mortgage insurance.

Veterans with the available funds for a down payment should compare all loan products to consider which will provide the lowest cost of housing. A skilled real estate professional and a trusted mortgage advisor can be valuable resources. 

A Lower Payment is Your Choice

Monday, April 21, 2014
by The Mike Parker Team

A Lower Payment is Your Choice

 

94% of purchasers last year opted for a fixed-rate mortgage at some of the lowest rates in home buying history.  Yet, some of them will pay more in interest than necessary based on the time they’ll own the home.

If a person only plans to be in the home a few years, the adjustable-rate can offer significant savings.

Not only is the interest rate on the adjustable-rate lower than the fixed in the initial period, amortization on a lower interest rate amortizes faster than a higher interest rate.

In the example shown below, a $200,000 mortgage for 30 years is compared using a 4.25% fixed-rate to a 3.25% 5/1 FHA adjustable rate.  The first five years of the ARM generates a $113.47 a month savings which accumulates to $6,808.20.  In addition, due to faster amortization on lower interest rate loans, the unpaid balance at the end of five years will be $3,001 lower on the ARM for a total savings of $9,801.

Assuming the adjustable-rate mortgage was to escalate the maximum allowed at each period, the breakeven would occur in 8 years and 6 months. If a person were to sell the home prior to this point, the ARM would provide a lower cost of housing for the homeowner.

For some people, the uncertainty of how the interest rate may change is not acceptable.  On the other hand, for the risk tolerant individual who may be more confident in financial matters or who may know when they’ll be moving next, the ARM can be a smart choice.

To make projections using your individual numbers, see the Adjustable Rate Comparison. 

Single Family Homes for Rentals

Tuesday, July 17, 2012
by The Mike Parker Team

Single-family homes used for rental property have distinct advantages over other types of investments.

 

An investor can borrow 75-80% at fixed interest rates on appreciating assets with definite tax advantages and reasonable control. The financing alone is attractive compared to some investments that require 50% cash and have floating rates at prime plus for one or two years.

Home prices have adjusted 30-40% around the country, mortgage rates are incredibly low and rents have risen in the past two years due to more demand and shorter supply. Indicators like these point to a strong and sustained rental market.

Consider you bought a $125,000 home for cash that would rent for $1,250 per month. With $15,000 income and allowing for property taxes, insurance and maintenance, it is still reasonable to expect $10,000 net income. You'd have an 8% return on investment without considering tax savings or future appreciation compared with 5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.

The reasonable control has a lot of appeal to many investors who find the volatility of the stock market unacceptable and don't want the risk associated with some of the alternative investments. Please contact me if you'd like to know more about available opportunities.

Second Homes Treated Differently

Monday, June 25, 2012
by The Mike Parker Team

Second Homes Treated Differently

While a principal residence and a second home have some similar benefits, they have some major differences. A principal residence is the primary home where you live and a second home is used for personal enjoyment while limiting possible rental activity to a maximum of 14 days per year.

 

The Mortgage Interest Deduction allows a taxpayer to deduct the qualified interest and property taxes on a principal residence and a second home. The interest is limited to a maximum of $1,000,000 combined acquisition debt and a combined $100,000 home equity debt for both the first and second homes.

The gain on a principal residence has a significant exclusion for taxpayers meeting the requirements. The gains on second homes must be recognized when sold. Even if you sell a smaller second home and invest all of the proceeds into a larger second home, you'll need to pay tax on the gain.

Tax-deferred exchanges are not allowed for properties having personal use including second homes.

If the home is owned for more than 12 months, the gain is taxed at the long-term capital gains rate. If the home is owned for less than 12 months, the gain is taxed as ordinary income which would be a considerably higher rate.

The article is intended for informational purposes. Advice from a tax professional for your specific situation should be obtained prior to making a decision that can have tax implications.

Have You Backed Up Your Home?

Monday, April 16, 2012
by The Mike Parker Team

Personal computers have been around long enough that everyone has experienced or knows someone who has lost their data due to a hard drive crash, accident or burglary. If they had a backup, the loss was inconvenient but not critical.

Do you have a backup for your personal belongings? Not that you need duplicates of all the items but do you have a journal listing of all the items with a description and their approximate values? That record becomes the backup that supports the claim for your insurance.

If a building sustains a total loss, the insurance company will usually pay the face amount of the policy. When it comes to personal property which might be 40% to 50% of the insured value of the dwelling, the insurance company is going to expect an accounting with receipts or at least, a relatively recent inventory.

The better your inventory, the less likely you'll have difficulty with the claim. Almost everyone has a digital camera that can take stills and probably even videos. The combination of the images as well as a written description will help you replace the belongings and serve as proof to the insurance company.

Once you've made the inventory, store it off site for safe keeping. Online storage in the "cloud" might be the best place to insure you'll always know where it is. Contact me for a free Home Inventory form; it's my way of helping you be a better homeowner

Displaying blog entries 1-6 of 6

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Mike Parker - CRS
HUFF Realty
60 Cavalier Blvd.
Florence KY 41042
859-647-0700
859-486-3300
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