Real Estate Information

Some police departments report as high as 98% of calls are false alarms. Not only is this an incredible waste of police resources that could be available for legitimate emergencies, it annoys neighbors, startles pets and results in expensive false alarm fees.

Know your codes – entering an incorrect keypad code is a common mistake leading to false alarms. The solution is to create codes that are easy for all members of the family to remember without them being obvious to potential burglars like your street number. Let everyone know when you change your code.

Secure windows and doors – be sure that all windows and doors are closed before activating your alarm. Disarm your system before opening a window or door.

House guests – tell visitors that you have an alarm system and when you normally arm it. Housekeepers, baby sitters, outside family and close friends also need to be aware of your procedures and possibly give them a code to disarm the system if it is accidentally activated.

Batteries – most systems have battery backup in case the power goes out. Know how often you need to replace the batteries; some last considerably longer than others.

Motion detectors – pets can trigger a motion detector and then, the alarm. There are sensors made for households with pets providing an alternative to turning them off. Other things that could activate motion detectors are helium balloons or curtains and plant leaves being blown in front of a sensor.

Home alarm systems are valuable to homeowners by increasing security, providing peace of mind and lowering insurance premiums. Some municipalities require a license fee for any home with an alarm. Use your alarm wisely.

During the holidays as throughout the year, getting cash from an ATM is normal for many people. ATM’s are available 24 hours a day and they’re located in bank branches, convenience stores, grocery stores, malls, airports, sports venues and on street corners.

Unfortunately, the convenience aspect can compromise personal safety especially if you are distracted or not paying attention. Planning for an ATM withdrawal and applying common sense can help you avoid trouble.

• Be aware of your surroundings throughout the entire transaction like people sitting in a nearby parked car or someone offering to help you.
• Safeguard your PIN. Don’t share it with anyone. Don’t write it down. Don’t use your birthdate, last four digits of your phone number or other obvious numbers.
• If there are other people at the ATM to make a withdrawal, shield the keypad when entering your PIN number.
• Keep your car doors locked and windows raised, except for your driver’s window, when using a drive-up ATM.
• Minimize the time spent at the ATM by being prepared with your card ready, what you plan to do and do not count your money until you are in a safe place away from the ATM.
• Take your receipt with you and destroy it if you decide to discard it.
• Be aware that some thieves use skimming devices to steal account and PIN numbers. If something doesn’t look “just right”, consider finding another machine to use.
• Especially at night, pay attention to locations with adequate lighting and being visible from the street. Don’t compromise your safety just because it is convenient.
• After you have your money, pay attention to see if someone might be following you. If you are concerned, go to a nearby police or fire station or well-trafficked business and call the police.
• If you feel uneasy during a transaction, cancel it, remove your card and LEAVE.

There may be a time in the not too distant future when we don’t have a need for cash anymore. Until that time, paying attention to simple safety precautions can help protect us during the holidays and throughout the year.

If you’re beginning to feel the pressure of running out of time to find the perfect gift, here are a few suggestions that may not be on their “list” but will certainly be appreciated.

The gift of really listening without interrupting, daydreaming or planning your response can be exactly what people want when they have something important to say. 

The gift of affection with appropriate hugs, kisses and pats on the back can demonstrate your love for family and friends better than words. 

The gift of laughter by sharing articles, cartoons and funny stories will say "I love to laugh with you." 

The gift of a simple, written note shows sincerity and real heartfelt sentiment that may be remembered for a lifetime and could even change a life. 

The gift of a sincere compliment supports a person’s need to be accepted and appreciated. "You look great in that color", "That was outstanding" or "I really enjoyed that" can make someone's day. 

The gift of random kindness or good deeds like holding a door or allowing someone to move ahead of you in a checkout lane shows respect for others.

Your smile, however, may be your most rewarding gift. Invariably, the person receiving the smile will in turn, smile back. The gift you gave will now be given back to you. It will be the right size and you can always use one more smile.

You’ve got $500,000 in liquid assets for your retirement and you’re still 15 years away. All your bills are paid; you have a small mortgage on your home; cars are paid for and great credit. Don’t break your arm patting yourself on the back yet.

People think more about what they’re going to do when they retire than whether they’ll have the funds to do them. Ask anyone who has retired, it takes more money than you thought it did. Let’s look at a hypothetical situation. 

To retire with $125,000 income in today’s dollars with a life expectancy of 25 years after retirement, you’ll need to have a net worth of $1.5 million at retirement including what Social Security may provide. Your $500,000 will grow to $1,045,420 in 15 years which will leave you about a half million short. You’ll need to save $24,149 each year for the next 15 years to reach your goal.

Is this surprising? Did you imagine that this example would be that far from its goal? It might seem staggering to save $24,000 each year but there is another way…investing in rentals. 

Real estate over the long term has proven to be a solid, predictable investment.  Cash flows, appreciation, equity buildup and tax advantages are the components that contribute to the rate of return. Increasing rents, available financing and solid appreciation make rentals particularly attractive in today’s environment.

Call me at (859) 647-0700 to find out more about how rental homes can help you reach your retirement goals.

FHA insured mortgages serve a sector of the market that is not necessarily being met by other loan programs. 

Securing an 80% conventional mortgage that doesn’t require mortgage insurance may be the lowest cost of financing but if the buyer doesn’t have 20% down payment, it isn’t really an option.

Securing a 100% VA loan doesn’t require a down payment or mortgage insurance but if the buyer isn’t a veteran with his/her eligibility intact, it isn’t an option either.

There are conventional loan programs with as little as 3% down payment but they not only require mortgage insurance, they also require a credit score of 740 or above which may eliminate some buyers.

For these reasons, FHA is a viable alternative to about 20% of new and existing home sales. The Federal backing of these mortgages makes it easier for first-time and low-income buyers to qualify because the requirements are not as demanding. They’re even more lenient towards buyers who have previously experienced bankruptcy, foreclosure or a short sale.

Finding the right mortgage for the right home is a team effort where both mortgage and real estate professionals work in harmony to get a buyer into their own home. Call us at (859) 647-0700 for a recommendation of a trusted mortgage professional.

General FHA loan requirements include:

• The loan is for primary residences only but can include two, three or four units.
• The property must be appraised by an FHA-approved appraiser.
• The property must be safe, sound and secure, in compliance with minimum property standards as defined by the U.S. Department of Housing and Urban Development.
• The borrower must be a legal resident of the U.S. and have a valid Social Security number. 
• The minimum credit score of 580 with a down payment of at least 3.5 percent, or a minimum credit score of 500 with a down payment of at least 10 percent.
• The borrower may not have delinquent federal debt or judgments, or debt associated with past FHA loans.
• The borrower must have steady employment history.
• Documentation is required if the down payment was gifted by a family member.
• The borrower must have a debt-to-income not exceed limits of 31% for front-end and 43% back-end ratio (some exceptions may apply). 
• Any judgments or collections on the credit report must be resolved or satisfactorily explained.

In 2007, Congress passed an energy act that required new energy-efficient standards for basic light bulbs. Standard incandescent bulbs are being phased out and eventually will be unavailable.

The alternative bulbs differ considerably in price. LED bulbs are the most efficient but they also cost the most. CFLs are a less expensive alternative.  Interestingly, the more expensive replacements offer lower operating costs and longer economic life.

One approach will be to inventory the different types and quantities of light bulbs you need in your home. Then, research either online or a big box store to find out what each type of bulb costs. This information will give you a total budget for converting your lighting.

It could be a significant expense to replace all the bulbs in a home at one time, especially when most of the bulbs still work. That’s where a plan might make sense.  

Replace the bulbs in the rooms where the lights are used the most such as kitchen, family rooms and bathrooms. There may be other “rooms” where the lights are used frequently like certain hallways or stairs. Outside flood lights for security purposes may be a large energy consumption.

Bulbs can vary in light output measured in lumens as well as color of light from warm white to bright white and daylight. The lighting label required by the Federal Trade Commission on all packaging will help you determine which will give you the most bang for your buck.

The last thing you want if you’re traveling these holidays is to worry about someone burglarizing your home. Use this check list to add some peace of mind while you’re out of town.

• Ask a trusted friend - to pick up mail, newspaper and keep yard picked up to avoid an appearance of being empty.
• Consider discontinuing your mail (USPS Hold Mail Service) 
• Don’t post about your trip on Facebook and other social media until you return – some burglars actually look for this type of announcement to schedule their activities. 
• Do notify police or neighborhood watch – especially if you’re going to be gone for more than just a few days. Let your monitoring service know when you’ll be gone and if someone will be checking on your home for you.
• Light timers make it look like someone is home – use several sets for different times to better simulate someone being at home.
• Do unplug certain appliances – TV, computers, toaster ovens that use electricity even when they’re off and to protect them from power surges.
• Don’t hide a key – burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may protect your belongings while you’re gone while adding a level of serenity to your 

Would someone really refinance their home and not take money out of it? Certainly, if they could get a lower rate, build equity faster and pay off the home sooner.

For people with extra cash available, this can be very attractive compared to the low savings rates being paid by banks.

In the example below, the current mortgage is 5% for 30 years after 48 payments of $1,342.05. The owner can refinance for 15 years at 3.37%. If they put $36,000 into the refinance, their payments will be slightly more but the mortgage will be paid off in 15 years. At that same point, if they keep the current mortgage, their unpaid balance will be $136,049.03.

If you have a goal to get your home paid off and have the available funds, a Cash-In Refinance may be just the strategy for you.

When loans are quoted by lenders, most buyers pay attention to the interest rate but not so much to the points that may be charged along with the rate.

A point is one-percent of the mortgage amount and considered pre-paid interest that affects the yield on the loan. Buyers or sellers can pay points but there can be limits based on underwriting guidelines for different types of loans.

A lower note-rate would obviously make the payments less. However, with a little analysis, you can determine how much points paid up-front can save a borrower or whether you'll recapture the additional costs in the anticipated time in the home.

In the example below, two choices are compared; a 4.25% loan with no points vs. a 4.00% loan with one point. If the buyer stays in the home at least 69 months, he will recover the $2,700 cost for the point on the lower interest rate.

If the purchaser stays ten years, he’ll save two thousand dollars over the cost of the point. A less obvious advantage will be realized because the unpaid balance on the lower interest rate loan will results in an additional $1,780 savings.

This is an example of a permanent buy-down but temporary buy-downs are also available.  A trusted mortgage advisor can help you determine alternatives.

The Mortgage Debt Forgiveness Act, originally passed in 2007, was extended three times to protect homeowners from paying income tax on debt that was relieved due to foreclosure, short sales or deed in lieu of foreclosure.  

The law expired on December 31, 2016 and unless it is extended again, homeowners with debt relief in 2017 may be subject to tax.

A homeowner might feel a sense of relief without the obligation of a delinquent mortgage but just because the payments are no longer due doesn’t mean that there isn’t another obligation that replaces it. If a lender cancels or forgives debt, a taxpayer must include the cancelled amount in their income for tax purposes depending on the circumstances. The tax significance could be serious.

This previously allowed relief only applied to a taxpayers’ acquisition indebtedness of their principal residence which did not include second homes and investment property. The maximum amount was limited to $2 million of mortgage debt forgiveness or $1 million if filing separately.

Due to the serious consequences involved in short sales and foreclosures, it is advised that homeowners faced with this possibility should seek expert advice from their legal and tax professionals.