Queercents

This is a guest post from Jeff Hammerberg, the founder of GayRealEstate.com, the largest company in the nation representing the rights of queer home buyers and sellers. These are his words…

As the warm vacation season approaches, the outlook for summer home buying is the brightest it has been in several years. In fact, 2008 may be the best time to buy a vacation home since 2002.

Prices have been repeatedly pummeled until they are now unrealistically depressed, even for this historical market downturn. Thanks to the current undervalued market you can buy vacation home properties in highly desirable locations for a cost that represents deep discounts from the norm - and - in some cases - bargain basement wholesale valuations. Read the rest of this entry »

“We pay the property manager to take care of the property. I’m an investor in this and I really don’t know whether he’s doing a great job or not. I’m sure he could do better.” – Charles Kirby

On Sunday, there was a little blurb in the business section of The New York Times quoting Roxanne Quimby, the co-founder of Burt’s Bees, about her disenchantment with being a landlord. Quimby purchased apartments buildings and homes in Florida and Maine after she sold her majority stake in the lip-balm maker back in 2003.

She enjoys running the company but says she “can’t stand” the apartment buildings because she “can’t deal with tenants.” Ms. Quimby said she didn’t use a management company because “I’m so used to being hands-on.”

“But these people are calling me because their dishwasher isn’t working,” she said. “It’s like, ‘What?’ ” “So I’m getting out of that,” she said.

What?? As in what was she thinking? I’m always surprised to learn when people want to manage their own rental properties. Read the rest of this entry »

This is a guest post from Jeff Hammerberg, the founder of GayRealEstate.com, the largest company in the nation representing the rights of queer home buyers and sellers. These are his words…

For months, real estate insiders have heard rumors that the nations biggest sources of residential loans, Fannie Mae and Freddie Mac, would soon be able to trade in the rarified market for so-called “jumbo” loans. Now the long anticipated wait is finally over, and the rumors have become a welcome and explosively lucrative opportunity. Not only are homes in the upper price range more affordable and much easier to finance than they have ever been, but the available inventory is extraordinarily and tantilizingly diverse.

Fannie Mae and Freddie Mac are federal national mortgage agencies. The twin quasi-governmental loan organizations report directly to Congress and are charged with the responsibility of maintaining smooth functioning and adequately financed mortgage markets. Their primary purpose is to ensure that Americans can always find affordable loans to help them purchase their share of the American Dream. But until March of 2008, the agencies were only permitted to underwrite and insure conventional loans, or those that did not exceed $417,000. Read the rest of this entry »

“Remember that credit is money.” – Benjamin Franklin

As many readers know, I’m a proponent of keeping an untapped home equity line of credit (HELOC) at my disposal for major emergencies. This isn’t my emergency fund. It’s what I call my catastrophe fund.

I’ve always believed that keeping a HELOC readily available is the best insurance policy and the back-up plan for if / when the emergency fund runs empty. Think about it… being able to tap this money could buy us time in the event of job loss or illness. And time is money.

When we bought our home three years ago, we put $300,000 down on the $1,100,000 purchase price. This was well over 25 percent of its value and considered reasonable in the era of zero-down loans. This amount gave us a nice chunk of equity in our house. I actually wanted to put more down, but our mortgage broker suggested otherwise. Her advice was that we could be doing smarter things with this money… as in buying additional assets (cash positive rental properties, etc.) or other long term investments. Read the rest of this entry »

This is a guest post from Jeff Hammerberg, the founder of GayRealEstate.com, the largest company in the nation representing the rights of queer home buyers and sellers. These are his words…

Home Warranties: A potential benefit for both buyers and sellers alike.

The market for homes across the USA has never been more challenging for homeowners trying to sell, nor more mind-boggling for buyers shopping among the historically overwhelming inventory of discounted listings. At the same time, mortgage lenders are more stringent than ever due to painful losses due to delinquencies and foreclosures, so it is important to write purchase offers on houses that can hold up to mortgage company and appraiser scrutiny. But beyond the initial sale of a home, legitimate buyer concerns arise regarding the condition of the home - and whether it will continue to provide a problem-free experience after the keys change hands.

One resource to add to your credibility toolbox is a home warranty. While these insurance policies are often overlooked or underrated, they can easily pay for themselves by boosting confidence, ensuring quality, and calming the emotions of nervous and cost-conscious buyers. Read the rest of this entry »

This is a guest post from Jeff Hammerberg, the founder of GayRealEstate.com, the largest company in the nation representing the rights of queer home buyers and sellers. These are his words…

Buyers and Refinancers Flock to Interest Rate Bargains

Rather than lowering the numbers cautiously and gradually, which is the Fed’s normal policy when tinkering with interest rates, Fed Chairman Ben Bernanke adopted a chainsaw approach during the first month of 2008. Wall Street and other world markets have reacted with mixed emotions so far, but American consumers wanting to buy a home or refinance an existing mortgage are completely ecstatic.

In an ongoing effort to avoid an imminent economic recession the Federal Reserve Bank slashed interest rates in mid-January, during an unscheduled meeting, citing continued concerns about a weakening economy. The Fed lowered its federal funds rate, which influences consumer loans such as retail credit card debt and auto loans. The discount rate - which calculates the interest banks pay to borrow money from the Central Bank - was also cut. Both rates were lowered by three-quarters of a point, the biggest single-day rate cut since October 1984. The historic decision to dramatically drop rates was the first to happen between regularly scheduled meetings since a half-point cut that occurred September 12, 2001, the morning after the terrorist attacks. Read the rest of this entry »

This is a guest post from Jeff Hammerberg, the founder of GayRealEstate.com, the largest company in the nation representing the rights of queer home buyers and sellers. These are his words…

Plain Talk about Fancy Mortgages: Stick with old-fashioned 30-year fixed

The word “candidate” derives from the word “candid”, and politicians running for office this year have learned that voters prefer frank talk, not a sales pitch. The same is true for homeowners shopping for a mortgage. As we prepare for springtime - which is historically the best time to buy a home - it is appropriate to talk about ways to weed out the hype about exotic residential mortgages in favor of old-fashioned fixed rate loans.

The most recent bull market in real estate was artificially inflated by high-risk loans that encouraged consumers to leverage themselves to the max. The old fashioned and reliable 30-year fixed rate mortgage - which helped to steadily grow this nation’s housing market for many decades - was upstaged by sexier, trendier, more exotic residential mortgages. Too many borrowers got in over their heads and are now paying a painful price, and the current mortgage crisis has left consumers shell-shocked and wary. Read the rest of this entry »

“It is only the poor who pay cash, and that not from virtue, but because they are refused credit.” – Anatole France

I’ve always kept a home equity line of credit (HELOC) on our house in Newport. Jeanine and I never access it. It’s there for catastrophic reasons (the HELOC would buy us more time to weather a major financial emergency). Over thirty percent of our home’s value is buffered in equity and the HELOC gives us access to about half of this value if we ever need it. Our first mortgage on the property is a 7 year fixed interest only. I’ve never stayed in a house longer than 3 years so despite what people think of ARM products, they’re a great alternative if used responsibly. It drives down our monthly payment and the mortgage interest deduction at tax time is significant.

I’ve used this same strategy on my rental properties, keeping equity lines open but paid off. However, with these properties the first mortgages are of the 30 year fixed variety. I’m paying down principal every month. I used one equity line this summer to do some improvements and then to carry the mortgage while I was trying to get it re-rented. It is now paid off again and all three properties are currently leased.

I give this background to demonstrate that I’ve been a prudent borrower and resourceful real estate investor. So it came as a surprise this week when I got a letter from Countrywide about the HELOC on one of my properties in Phoenix indicating this: Read the rest of this entry »