FOUR GREAT REASONS TO CHOOSE AN INTEREST-ONLY LOAN

Somewhere along the way, it’s been burned into our brains.

Interest-only loans are bad.

The endless Chicken Little cries of columnists and talk show hosts have scared a lot of people. If you bought recently, and if you got 100% financing, and if real estate values tumble, and if you have to sell, and if you took an interest-only loan…… you could be in trouble


Could be?

Travelers Haven  
W Cherry St Chicago, IL 60606‎

If all those things happen, you will be in trouble, but it won’t have anything to do with what kind of loan you have. Let’s be different for a moment and talk about four things that interest-only loans do really well.

Pay all the principal you want. Interest-only loans don’t prohibit paying principal. You’d be surprised how many people tell me, “We don’t want one of those; you never pay down principal!” What, the bank won’t take your money? Pay as much principal as you like, when you like. Treat it like a regular loan if you want. The interest-only part is just an option.

Buy a bigger house. Interest-only loans can shave a couple of hundred dollars per month off the payment (at least in Sacramento, your mileage may vary). But because buyers qualify at the lower payment, the doors of home ownership open a little wider. For some, an interest-only loan means having breathing room when things get tight. For others, it means buying a bigger house, buying in a better neighborhood, or getting your kids into the right schools. Think about that. Those happen to be the same qualities that cause homes to hold value better and appreciate more. Stephen Covey says “begin with the end in mind.” I say “buy with the sale in mind.”

Shape the payment. I use interest-only loans to give payments a shape. Look, people’s incomes are rarely flat. Many folks have unpredictable amounts of overtime, bonus, or commission income. Young people have growing incomes. Retiree’s incomes shrink. Single people get married. Marrieds get single. It’s great to give payments a shape that looks a little more like their life.

Save money. Did you ever wonder what happens when you make a large principal payment on a traditional loan? Nothing. At least for a long time. Payments don’t change, interest costs don’t drop. You have to refinance to make that happen. And that cost more money. Sure, if you keep the loan long enough, you’ll skip a few payments and save some interest 25 years down the road. But will you even be in the house then? On the other hand, interest-only loans respond immediately to a principal paydown. Your payments drop next month, your interest costs are lower, and you didn’t have to refinance to do it!

I hope interest-only loans look less scary now. I’ve got more to say on this topic later, so keep your ear to the rail. While they’re not for everybody, they might be the right tool for your needs. As one client recently observed, “traditional loans are almost interest-only the first few years anyway, aren?t they?” Maybe that should be reason number 5.

Got questions; need advice or help with your loan? Call or email me. It’s what I do.

INVESTOR RATES SKYROCKET

I was quoting rates to an investor client today and had a chance to examine the effects of the new Loan Level Pricing Adjustments announced by Fannie Mae last week.   The client is putting 25% down and has a mid Fico score of 6.72.

The “adjustments” to the published rates included 1.75% for investment property and a 2.0% adjustment for her Fico score.  Now ordinarily, lifting the interest rate will eliminate one point in fee for each quarter point we elevate the rate.   Thus, raising today’s 5.25% 30 year rate to 5.5% would reduce the 3.75 total adjustment to 2.75 points, and so on.

Unfortunately, with the way banks are pricing loans today, that formula is obsolete.  There is a one to one ratio between interest rate and points at the moment, and so this loan will require that the investor pay several points at least for a rate in the 6-7% range.

Travel To Rome & Staying Safe

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Travel Rome: Staying Safe

Rome is generally considered a safe place to enjoy a vacation but as with any big city you are better off if you don’t look like a tourist. You shouldn’t have your camcorder or expensive camera out for everyone to see. Keep your valuables and money in the safest place possible, especially when traveling. As with anywhere you go, use common sense with traveling.

Travel Rome: More Safety Tips

When you are traveling on the Termini, Esquilino, and bus you should take extra precaution with your valuables as these areas are subject to more crime. It is wise to read up on all of the tourist scams to help you avoid becoming a victim when you are trying to relax and have a nice vacation.
The majority of crimes that take place are pick-pocketing and purse stealing in crowded areas but luckily there are low numbers of violent crimes. The police in Italy are usually friendly and always helpful. The Carabinieri in black uniforms are the military police, the blue and grey uniforms are the Polizia which are civilians but both do the same things. The Guardi di Finanza in grey uniforms handles all customs work.
If you are a victim of robbery then it is vital that you find the nearest police station and report it. Otherwise you could jeopardize your travel insurance claim and be left empty handed.
Rome has two rival Serie A football clubs including the A.S. Roma and the S. S. Lazio which have a long history of fighting and rioting between them. For those who are brave enough to show support for either team be prepared to endure heckling and confrontation for opposing fans. During the Rome Derby when both teams play against each other it is wise to stay close to your fellow supporters and enjoy the game in peace.

The politics of withdrawal

Thursday June 15th 2006, 3:01 pm - list your home for rent for free

During the 2004 election, then-presidential challenger John Kerry said he would keep the troops in Iraq for the foreseeable future. Recently, Kerry stepped up and backed up some of his colleagues’ call for bringing American troops out of Iraq.

Kerry’s arguement is in a bad position right now. Zarqawi’s death has certainly make the Iraq streets less murderous, John Burn of the Times told Charlie Rose last night. This might be a small sign of positive progress. Having come this far, should the US not willing to see through the foreseeable end?

What Kerry and his colleagues should bring to the debate table are incremental goals to achieve the withdrawal. Constructive criticism win long-term political points. Scoring cheap, red-meat soundbites will only provide short-term gain.

Kerry and his colleagues should layout reasonable objectives and reasonable dates. For instance, Notebook would like to see the US meet certain level of security by certain date. How about securing a specific town within the next 3 months? Then another town 3 months after that?

Victory in Iraq would prompt the return of the troops, but at the same time repair some of the damages that US caused by going in. Kerry voted for the war. His vote partially got the country into war. The oil addiction is here to stay and will stay for another decade or two. No doubt the US will get off this addiction, but it cannot happen overnight. The oil Iraq provide for the near future will cushion thethe US economy and eventually the global economy.

Success in Iraq will also trigger some pressure on Iran. The US’s credibility right now rises and sinks with the events in Baghdad. A lot of money already invested, a lot of political chips already spent, staying just a bit longer might prove rewarding in multitude.

Notebook realizes that the Republican is not doing very well at the moment. But if the Democratic party want to fully capture the House and Senate, it must act like a reponsible party and not renegades with splinter cells. John Kerry wants to run in 2008, fine, but until his announcement for the rematch, his constituents deserve a senator looking out for them and not to his future plan.

It’s your property and up to you to choose wisely what happens to it, even after you’re gone.

“Cheap land, cheap survey,” we used to say… but a lot of rural land ain’t so cheap any more! This means that if you have owned a cherished piece of rural land for rural-land.jpgyears, you have a responsibility now to deal with it as carefully as you would deal with any other big asset… and as wisely as you would deal with your most difficult child.

First, let’s answer some important questions. Do you intend to retire on this land? Do you hope to spend all your remaining days there, or do you expect to sell at some point? Will you need to sell it to fund your retirement, or is it important to keep the land in the family? How will you protect it from nursing home costs? Which child do you hope will get the land, or will you break it up, or will you leave it to all of them? … And that’s just for starters! Ignoring these and other big questions is not going to make them go away, but instead it will likely lead you and your family to risk suffering some avoidable tragedies. Denver corporate rentals are another good option for certain types of people.

Everyone’s situation is so unique that we can’t cover every possible issue here, but we can give you a starter checklist. Once you and your family have made your decisions, then you can start to go down this list; you will need the help of lawyers and other professionals, but they can’t help you unless you have thought it through enough to be able to tell them what you want:

• If you will need to sell the land to fund your retirement lifestyle, or if it is simply becoming too much to care for, then here are the steps that you should take:

• - Consult at least three real estate professionals. You want a good idea of what the land is worth, what the market is like, and whether you should first subdivide the road frontage or get a zoning variance or do something else to make your land more attractive. Don’t get just one opinion… get many!
• - Make sure that your title is clean. If you have owned the land for a very long time, and especially if you inherited it, then you ought to know right off the bat whether there are any clouds on your title. A title search is a few hundred dollars well spent.
• - Check with your municipal or county planning department. Try to find out what is coming up for your area in terms of zoning changes, future roads, and future subdivisions or municipal facilities. What you learn might make you decide to hold out for a few years more as things develop, or it might convince you to get out as soon as possible.
• - Consider buying an up-to-date survey. Remember our “cheap land, cheap survey” quote above! Most rural land is so poorly surveyed that it is impossible to know for certain what you own or even just where it is, and all of that is important if you are planning for the future of your land. But surveying is expensive. Get competitive firm quotes, and if you can’t afford it then hold off and let your eventual buyer pay for it.
• - Consider subdividing. In some areas, population pressures are forcing highly punitive changes in zoning and in building regulations – big lot sizes, excessive slope restrictions, ridiculous frontage requirements, and so on. Even if you don’t want to sell right away, for you to do whatever is necessary to grandfather your land under former law might be just common sense.

• If you hope to stay on the land for the rest of your life, you should first do everything laid out above! Then in addition you ought to do the following:

• - Plan to pay your living expenses for the rest of your life so you won’t have to give up and sell the land when you are 87 and into a depressed market for Denver corporate rentals.
• - Plan to pay for nursing home costs. This means that you will need long-term-care insurance, and it may also mean that you will want to hold title to the land in an irrevocable trust.
• - Plan your estate. Estate tax laws vary by state, and even on the federal level any individual estate worth more than two million dollars is going to be taxed this year. How much is your whole likely estate worth? Have you and your spouse planned around estate taxes so they won’t hit you until the second death, and have you planned to pay taxes at that second death so your heirs won’t be faced with a forced land sale?

• If you want your heirs to inherit the land, you should first do everything laid out above! Then in addition you ought to do the following:

• - Make sure that all your heirs really want the land. Don’t assume it! Instead have some good, frank talks. If one or more of your children would rather have their inheritance in cash, then forcing everyone to share the land is only going to guarantee some legal wars for Denver corporate rentals.
• - Make sure that they can afford to keep the land. Some parents leave funds in trust for taxes and maintenance, while others provide for a way for some of their children to pay costs that will be repaid to them in additional use privileges or in eventual repayment when the land is sold.
• - Provide for a stable form of ownership. Depending upon the jurisdiction, this might mean a limited partnership, a limited liability company, or a trust. Take the time to make certain that whatever you do is drafted carefully to meet your family’s specific needs.
• - Provide for a clean way to end the partnership. Nothing goes on forever. Your trust or other arrangement should provide for a neat and obvious way that it can end amicably.

Owning rural land can be a source of family joy for years or decades more, but to ensure that there are no bumps in the road it just makes sense that you plan for the land’s future. We can’t offer you legal advice. What we can do, though, is to point out all the ways in which you can plan to do things right!

The Many Benefits of Using Solar Panels

Solar panels can be used in so many different applications that it would take volumes to talk about all of them. In the same token, the benefits of using them are also just as numerous. Solar power as a form of electricity has been around for a few hundred years, but using solar to heat homes, cook food and make water hot has been around for centuries. This article focuses more on the electrical applications, however.

In the last few decades, with the demand for solar power increasing, solar panels and the technology behind them has grown by leaps and bounds. They are smaller, lighter, and can be used for just about anything these days, from charging and powering laptops, small appliances, even to power homes and businesses. Output efficiency has also grown, and now even on a cloudy day your solar panel can absorb at least half of its normal capacity. There are flexible solar panels, which can be used for marine applications. They can also be used for back packers. There are small panels that are integrated into things like backpacks, identification tags, and many others.

Here are some of the many different benefits of using solar panels in your every day life. One of the major ones is the solar power is free, and even on a cloudy day, you have to be happy that you are using free power. Solar power is abundant, and totally renewable energy. Because of this, it is also clean energy, not emitting any toxins into our atmosphere like a lot of forms of electrical power do, say power plants and gas generators.

Solar panels are versatile. There are more different kinds of solar panels than you can shake stick at, and can be used for many applications. You can take a solar panel with you wherever you go, and have electrical power to run your laptop, play video games, or keep your cell phone charged at all times, especially when needed in an emergency.

You will save a lot of money, on energy costs, batteries for your flashlights and other electronics. Using solar power for outdoor lights can save you hundreds on you power bill every year. Having solar panels can help you save money on batteries, because many of your electronics, even those without rechargeable batteries, can be recharged or powered by solar energy.

Solar panels, lighting, charging systems, generators and the like are easy to install and usually don't require any extra wiring. This means that you can set up a solar panel for pumps that are way out on your property, or take a panel with you to a remote campsite, use them on the beach, just to name a few.

Now there are some disadvantages of solar panels, but not many. One of them is that they are affected by the sun. The sun goes down at night, but the batteries store this energy during the day and release it's power at night, like solar lighting for patios and walkway. These systems can be a little more expensive initially, but they can pay for themselves in just a short period of time.

AMV IM

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