Interest Only Loans - Can You Afford Them?

 

Interest-only and deferred-interest mortgages are gaining increasing popularity, as homeowners like the idea of having the freedom to decide how much to pay against their mortgage each month. Interest-only loans offer you the option to pay only the monthly interest, or you can pay the monthly interest and as much of the principal as you'd like. Deferred-interest mortgages give you even more choices. In addition to the payment options of an interest-only mortgage, a deferred-interest loan also allows you to pay just a portion of the interest payment each month (the unpaid interest would then be added to your principal loan balance).

 

To help you decide how much home you can afford, it's smart to think in terms of an interest plus principal payment each month. If you can only afford the minimum payment on your mortgage, you may be overextending yourself. Having a choice to pay only the minimum is quite different than only being able to afford the minimum.

 

Is an interest-only or deferred-payment mortgage right for you? If any of the following situations apply to you, these loans may be just what you've been waiting for:

• If you need cash flow and have a low interest rate, paying interest only is the same as borrowing money at a great rate.
• If you're paid on commission or depend on tips, and your income fluctuates month-to-month, interest-only or deferred-interest payments are great. When commissions are down, make the minimum payment. When you have an excellent month, pay the full payment or more.
• If you invest the money you don't put toward your mortgage in something with a higher rate of return. For example, if you pay 6.5 percent on your mortgage but find an opportunity to make an investment that returns 9 percent, you will make 2.5 percent on your money that you wouldn't make if you had paid your full principal plus interest.
• You have higher interest debt to pay off. Again, if you have credit card debt at 15 percent, it makes dollars and sense to pay that before mortgage interest debt at 6.5 percent.
• If you expect to be in your home for less than 10 years.
• If you live in an area with appreciating home values. Regardless of what you've heard, most of the country is still appreciating in value. In those areas, even if you pay mostly just interest on your home, you're likely gaining equity in your home. In some cases, you can gain equity even with deferred-interest minimum payments.

 

Make sure your mortgage professional goes over all the numbers and fully explains the payment scenarios. Don't assume anything.  Get real numbers and you'll make the best decision.

 

Landscape Tips for Home Sellers

 

If prospective buyers looked at your house today, what would they see outside?   By spending $500 to $3,000 on plants and materials and a few hours of time, you can achieve a well-landscaped look without shelling out for professional help.  Besides the personal enjoyment you'll get from a prettier yard, landscaping adds more value than almost any other home renovation.

 

Edge the beds Cutting fresh edges where grass meets mulch makes the lawn look well kept.  Also, if your foundation plants are overgrown, widening the beds by two feet will make the shrubs seem smaller.

 

For truly lush turf, ideally you should start regular fertilizer treatments a year before listing the house. But you can green up the lawn with just a single application.  Expect each monthly application to cost about $20 (for straight fertilizer) to $30 (with weed killer).

 

For about $1 a plant, you can blanket your yard with petunias, impatiens and other small annuals that will flower throughout the current growing season.  Also invest a few hundred dollars in some larger perennials and in shrubs that stand at least four feet high.

 

A distinctive yard will make your home more appealing to buyers, so replace plants that don't flower, or provide interesting foliage with eye-catching alternatives, like a patch of blackeyed Susans, a flowering crabapple or a cutleaf Japanese maple.

 

If you're planning to stay put, you don't need to spend hundreds of dollars for big plants. You'll save 50 percent or more by buying small ones and waiting a few seasons to get the full visual impact (when planting, make sure to space them based on the mature size listed on the label, not how they look now).

 

Just a few hours and a little planning, and your home can be transformed into an eye-catcher, rather than an eye-sore.

 

House Hunting Strategies

 

There are many factors to consider when looking to purchase a home - from what neighborhood to which floor plan and much more.  Let's review 4 things you should keep in mind when looking for a home.

 

1. Location, location, location.

A house needs to be near what's important to you and your lifestyle. How important is it to you that your home is close to your office? Is it more important to you that you're close to a good medical center or a convenient grocery store?

 

2. The house.

Does the floor plan meet your needs? Does it have enough room for your family to grow if future growth is in your plans? Think of buying for the long term and consider whether the house meets your needs, not just now, but any future needs you can anticipate. And don't discount your gut feeling. If this home doesn't feel like home to you, then move on.

 

3. Affordability. 

Getting pre-qualified for a mortgage before you begin visiting homes is the best way to know what you can afford.  Often people fall into the trap of looking first, and falling in love with a home that's well out of their price range.  Only look in whatever price range you can pre-qualify for.

 

4. Resale. 

As much as you like the idea of seeing you and your family growing old and gray in your new home, chances are you won't.  Most people don't live in their house even for the full term of their mortgage.  When home shopping, keep in mind that at some point you will probably want to put your home on the market, so don't compromise.  If you decide a house has some aspect that you can overlook, you need to be aware that someone else may not feel the same way.  When home shopping, choose a house that is not only appealing to you, but is also likely going to appeal to others down the road.
 

100 Years

 

The year is 1907.

One hundred years ago.

What a difference a century makes!

 

Here are some of the U.S. Statistics for the Year 1907:

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The average life expectancy in the U.S. was 47 years old.

Only 14 percent of the homes in the U.S. had a bathtub.

Only 8 percent of the homes had a telephone.

A three-minute call from Denver to New York City cost eleven dollars.

There were only 8,000 cars in the U.S., and only 144 miles of paved roads.

The maximum speed limit in most cities was 10 mph.

Alabama, Mississippi, Iowa, and Tennessee were each more heavily populated than California.

With a mere 1.4 million people, California was only the 21st most populous state in the Union.

The tallest structure in the world was the Eiffel Tower!

The average wage in the U.S. was 22 cents per hour.

The average U.S. Worker made between $200 and $400  per year.

A competent accountant could expect to earn $2000 per year, a dentist made $2,500 per year, a veterinarian $1,500 per year,  and a mechanical engineer about $5,000 per year.

More than 95 percent of all births in the U.S. Took place at HOME.

Ninety percent of all U.S. Doctors had NO COLLEGE EDUCATION!  Instead, they attended so-called medical schools, many of which were condemned in the press AND the government as "substandard."

Sugar cost four cents a pound.

Eggs were fourteen cents a dozen.

Coffee was fifteen cents a pound.

Most women only washed their hair once a month, and used Borax or egg yolks for shampoo.

Canada passed a law that prohibited poor people from entering into their country for any reason.

Five leading causes of death in the U.S. Were:
1. Pneumonia and influenza
2. Tuberculosis
3. Diarrhea
4. Heart disease
5. Stroke

The American flag had 45 stars - Arizona, Oklahoma, New Mexico, Hawaii, and Alaska hadn't been admitted to the Union yet.

The population of Las Vegas, Nevada, was only 30!!!!

Crossword puzzles, canned beer, and ice tea hadn't been invented yet.

There was no Mother's Day or Father's Day.

Two out of every 10 U.S. Adults couldn't read or write.

Only 6 percent of all Americans had graduated from high school.

Marijuana, heroin, and morphine were all available over the counter at the local corner drugstores.  Back then pharmacists said, "Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and bowels, and is, in fact, a perfect guardian of health." 

There were about 230 reported Murders in the ENTIRE  U.S.A.!!!

Just Try to imagine…..

What it may be like …. 

 

In another 100 years !!!!!!!

IT STAGGERS THE MIND!!

 

Fix-ups That Can Speed Your Home Sale

 

You don't have to spend a fortune renovating your house to ensure a quick sale at the best price. Some of the most effective fix-ups are also the cheapest.

 

Spending just $400 to $500 on fresh landscaping, for example, can boost your home's value by $1,600 to $1,800, according to a survey of real estate agents conducted by HomeGain, an Internet real estate service. Spend another $300 on cleaning and de-cluttering your home, the survey found, and you could add another $2,000 or more to the sale price.

 

To pinpoint the projects that make the most sense, start by touring your property with fresh eyes, as if you were a prospective buyer. Drive or walk up to your house and see how it appears from the street. Walk through the front door and take a look around. You might ask a trusted friend to help you spot problems, clutter and weird smells that you've long since stopped noticing. Keep a pen and pad handy to list the projects that need to be done.

 

Here are some more tips to watch for and think about…