Do not even think about doing anything to your place until you get a permit
 from the local officials.  You must get a written document that will allow you
 to do the changes you want; but if you do the changes without the permit
 and something happens, even if it is an accident, they will chase you until
you are six feet under and YOU WILL still be liable for the result.
You wish to modernize, enlarge, make it easier to live in, etc. but you really aren’t prepared unless
 you engage a realtor or contractor to tell you how your little plan will turn out.  It is much better
to get an architect to draw what you want than to change it over and over again because it isn’t coming out right.  The remodel will cost money and if you don’t want to lose it get a plan and someone to assure you that you have a real chance to make it work.
If nobody will give you that guarantee give it up, or start over with a new plan.  You can make a
good amount of money if your plan is good, your workmanship is fine, and you haven’t over spent for the materials needed to finish the project.
I can go on for pages telling you all the areas that many people overlook which can seriously hurt
the out come.  Don’t rush!, Make sure every thing you can think is in the right place.
Once you feel you are ready your had better check the housing market and which way it is heading: higher or lower!  Do not try to buck the trend.
I have given you this little lesson in remodeling your house because it all counts toward having a winner and money maker if you get it right.  BUT, it isn’t easy!  I have remodeled many of my houses and most have turned out fine, but I have overspent, and started in the wrong season as well.  Be more cautious than I have been and you could be a winner.  GOOD LUCK!

Starting with the old joke, they are way to heavy to flip, unless you have

an army of weight lifters!  I started laughing one day walking by a seminar on flipping homes with the participants rushing out the door discussing how much they are going to make and how quick and easy it will be.  When I picked myself up off the floor from the laughter I had produced I wanted to scream at every person who felt that were now in the driver street. Absolutely wrong!
 I had the experience of flipping a large office building, 8 stories and some
70,000 square feet in a beautiful city, with some very famous citizens.  Not only was it a magnificent building it was designed and built by a known architect who
made one major mistake, too costly to redo.  The building never did well and was owned by a small CPA firm, and their partners.
 I became involved when one of my realtors brought the building and its problems to me.  The biggest problem was paying the property taxes in three weeks or the CPA’s would lose the building to the County for not paying the property taxes.  Not a lot of money, but we needed to make a quick decision.
The price was $2 million and we needed terms to attempt to turn this building.
By the way the year was 1967 and the building was well under 50% full.
 I began the venture by enticing a friend who was a builder, as we were
going to have to put in at least 4 or 5 floors of lease hold walls, offices, storage
and a great paint and carpet job for each inhabitant.  Then we raised some money
from former clients including the executives who ran one of the largest “think tanks” in America.
We raised only $200,000 cash and gave the CPA’s a note for $2,000,000.
We then started planning to get many new tenants, which meant we had to fire
the realtor’s who were trying to lease the building, and showed virtually nothing
for their effort and try to fix the largest mistake of the builder.
The builder wanted the view and built the building with all windows in every suite either facing either east or west.  This made the building cold on
one side and hot on the other.  We call in the experts who quickly showed us
how to neutralize the air.  It didn’t work perfectly so I had every owner of a
company in the building come to a meeting with a woman who works with them.
I then demonstrated the difference between men and women when it comes to
the perception of hot and cold and the battle was over.
 I was at the building which was over 1.5 hours away from my homer for 2 years including weekends to make sure I didn’t miss a perspective tenant.  We got it over 90% over those two years and decided we had enough.
We sold the building in late 1969 for double what we had paid.
Would you do what we did even for a chance to get that type of return.  There were plenty of problems with the city, the tenants, the seller’s and our partners
but we tough it out and made it work!
The easy answer to this question is probably not for 95% of the sellers.  It might work
for about 5% of sellers who have a good background in finance.  If not, stay away from this
so called opportunity.
Carrying a note on a sale transaction where your property is the one that is being sold
is tricky and dangerous.  Tricky means that you are helping the buyer to raise enough finances to
purchase your property but it doesn’t mean that you will ever get your money back by having the
buyer pay off the note you extended to him so that he could close the transaction.  If you understand the entire transaction and realize the buyer can default on the note, in payments
or in the final payment that would get you the money you have loaned to the buyer. The missing
line is you lose!
Again, if you are actively engaged in the field of finance, especially the financing of single
family houses you might take a chance after a full analysis of the deal and the borrower to make sure he probably will make the payments.  That would be fine.
Most sellers haven’t enough education and experience in this type of lending. Nevertheless
the idea that you will get a good interest rate which will bring in more profits if it all goes according to Hoyle is quite a temptation!  Buy a lottery ticket instead.  You can almost throw your money away when going to buy the ticket, yet it is better than carrying paper for a buyer.  You will only lose a few dollars and it will be over quickly.
Banks are basically the enterprises that make loans to purchase houses and they don’t get
paid back from time to time, Why do you think your special.  I have a Master’s Degree in Finance
and have been in the mortgage industry for about 30 years and I would never consider the risk.
You obviously made your money by buying the house and watching and helping it to increase in
value.  You need to keep this in mind “It is better to go out a winner” and let others woo the Fairy
God Mothers or Fathers for this extra benefit.
Owning a house is the smartest thing to do because of the various maneuvers you have at your fingertips!  You can get cash out of your house
with minimum equity, you can deduct the interest on the mortgage and the property taxes.  You can pull money out to pay off your credit cards, and the interest
on the money that paid off the credit cards is deductible through the mortgage, but generally not deductible on their credit cards, unless the bills are for business,
or at least you will have a much lower interest rate on the balance. (Mortgage rates are generally lower than credit card interest).
The overwhelming home buyers finance their homes, because a house is generally more money than most people have to invest.  However, having a
home loan that you pay on time will build your credit rating better than almost anything else.  A good credit rating is as good as gold!  The real payoff is the amortization
by paying on the loan  As you pay the loan your equity in the house increases as the debt goes down.  Add to that the fact that most areas usually increase in price
and your net worth will continue to grow.
As years go by the occupants of the houses tend to want more: a second home, a rental or a new place to live.  In the first two cases a leverage
takes place: using some of the equity to own another house and watch it grow.  In the last case, a new house is  total leverage as you are taking your wealth
and buying something bigger that might just grow quicker and larger. This can be done more than once and can have a great payoff.
Most Americans try to build a retirement cushion with those who work for companies or unions that generally get it done.  There are still a number of
seniors who end their working years with very little to show for it, except their houses.  These people usually have houses that are still carrying a mortgage but have
the luxury of having enough equity in their houses that can be used for rental housing by selling their place.  If they are old enough, 62 years or more, most could
probably get a reverse mortgage, which would allow them to stay in their own home without any mortgage payment.
 Basically I am showing you the life of a middle class American family who can more or less plan on a steady home life by simply buying a house
as a younger person and holding on through their life.  Managing your money will be easy the faster you buy a house when you are starting off as an adult.
I close by telling you that a number of Americans do way better than the average, because they worked on their possessions, making them better
and more valuable and are living the life that they always wanted.  It is possible for anyone who wishes to work hard and live by the rules.
Let me begin the case for the Reverse Mortgage, because of only one thing:  It saves the senior years for so many people that those who oppose spend days and nights trying to make you
believe that it is a trap of major proportions.  They will tell you about your almost 100% chance of losing your house; your heirs will never see a penny of your money, as well as inspectors coming to your
residence to make sure you aren’t violating the rules.  And of course the Government can stop sending you checks, if you are suppose to get them, whenever they want!  None of what I have put down is
true.  Lets look at the facts from real people I have put into a Reverse Mortgage.
 I will talk about a couple in their late 60’s to early 70’s; A widow who was in her 70’s and a retired screen writer and his wife in their late 60’s. Both of  the two couples and the widow were interested
in a normal mortgage, not a reverse mortgage.  How hard would it be to make the payments on a new cash out mortgage.  How would they qualify for a new mortgage after the one they wanted because they all
were out of work and surprisingly they all were worried about their family trying to borrow some of their new riches.  If they had gotten $100,000 on a new loan the family would find out and want a small handout or loan
because the clients had money.
The couple in their late 60’s and early 70.  The husband was self employed as a handy man but was too old to continue.  The wife was a top notch legal secretary in a top notch law firm.  I told her
that once she reached her 70’s they would probably let her go.  I was almost right:  they closed their doors and she was out of work. They had one son who was getting married and was concerned about losing
his inheritance.  I told him he could replace me and simply pay their mortgage every month until they passed and the remainder would be his.  He declined and they got their reverse mortgage and when her firm
closed she called me and told me that they would have lost their house without the reverse mortgage.
The 70 year old widow and her late husband were clients of mine.  I put them in a short term variable as they were planning to move up to Northern California near their daughter and grand children.
Her husband died and the short term loan was about to increase in payment so she wanted .to get another one.  She couldn’t qualify.  She had plenty of money, but not enough to splurge for two or three nights
out with her girl friends.  She limited it to one night a week. She had good equity in her house and I got her a stipend that floored her.  I talked with her daughter who didn’t need or want her house or money
and gave the blessing to her mother.  She has never been happier.
The last couple was a writer who had a hit TV show that went for years.  They had two daughters who were grown but one was a drug ddict who cost them most of their retirement income. She eventually passed away and they were desperately short of income.  I gave them a reverse mortgage and their is just fine at this time.

Without the Reverse Mortgage they would have had to sell their house of 40 years which wasn’t an
appealing alternative.  They are very happy with their mortgage that will carry them through until they also pass away.
Not having a house payment helps the mind as well as the wallet.  Try thinking about that and
see what it feels like.  I am certain you will like the vibes!
If you buy a house that you plan to live in and fix it up a bit you can save taxes which will
come back to you as a “real savings”. You must live in the place for two years but you don’t have
to sell it after two years.  When you do sell it and you have a $250,000 profit and you own the place yourself, the $250,000 profit will be tax free.  If you are married and you make at least a $500,000
profit after two years of living there; then you will have a $500,000 profit  without any tax on it.  And yes,you can keep doing this as long as the tax law is in affect.
If you think you can do better in the short run as far as the mortgage expense between a 30 year versus a 15 year you have something to learn.  After 2 years of paying a 15 year loan you will have amortized more on the 15 year loan and your payment will be less in the 1st two years than the 30 year amortization and cost of the monthly payment in 5 years.  So if you are just looking for a quick and inexpensive start run the payment and amortization on both the 30 year fixed and the 15 year fixed at their current rates.  You will be surprised.
Don’t shop for mortgage brokers after you have decided on one.  You may see a better rate with
a broker you didn’t choose, but you can loose your rate that is locked in and not get the other brokers rate for various reasons.  Do your shopping before you commit and it will go much easier
for you.
Don’t try to buy or sell your house yourself if you don’t have real estate experience.  You may think you are saving money, but if you miss just one little point it could cost you more than you save.
Fannie Mae and Freddie Mac have raised their loan limits giving those with higher loans a chance
at the lower priced conforming and agency jumbo’s rates.  Check with a broker or bank for the new limits they have raised their loans.
Last but not least keep informed in the financial dealings in our country.  It can save you a lot of
money, and much less grief.
It was 2006 when Fannie and Freddie raised their conforming rate to $417,000 and their agency jumbo to $625,500.  They were raising the limits every one or two years and then they stopped.  Now they have raised the conforming limit in most continental states to $424,100 and the agency jumbo to $636,1500 to $954,225.  Hawaii and Alaska has the conforming limits equal to the continental states jumbos!.  There are also some areas on the mainland that are high cost areas and carry the same as Hawaii and Alaska.
Stay tuned for a complete explanation


When you make the decision about the title of this piece you might be changing your life or
you might be locking in your future plans.  So which comes first?  You need to answer the question for yourself if you are planning a future, because this can have a very important part
while looking for your retirement.
Before I get into this I want to give you an inside look at the mortgage industry.  It is interesting
and unique.  The industry continues to put out loans with interest rates that 99% of the listeners
can’t get.  Does the industry care? No. They want new borrowers to think they are the best company to deal with in procuring a new loan.
The mortgage industry gets you loans for many different reasons.  You can be buying a house and need a first mortgage;  you could also be needing a 2nd mortgage as well.You could be selling your house and your buyer wants to assume your current loan.  Do you know what happens to you if that occurs?
The industry is very active in refinances as well as taking some lump sums out of your property
for other uses.  Do you know how much you can take without paying taxes on the money?
You might also be seeking a reverse mortgage.  Now you see why the advertisers are willing to
do what they need to to get more customers.  The biggest ploy is announcing a very low interest
rate on a 30 year fixed and tell you how much money you will save.  Most of the people who fall for this lose significant amounts of money while believing they are saving large amounts on their new payment.   But realistically the worst part is forcing you to take your eye off the future which
is most important.
If you are in your late 30’s or in your 40’s you need to set a plan to get you where you want to be in the next 10 to 15 years.  If done right you can begin planning for your senior years. You will want to have the house paid off as quick as possible and consider where you want to live for the
“fun” years.  Some people want to remain in their home and with it paid off they can use some of their equity for a second home (vacation home), and really have great enjoyment.
If you can define your family’s future then you can listen and laugh at the “come on’s”that won’t help you.  Once your plans are in concrete then you can start looking for a better mortgage than
you might have now.
Get together with the family, even if it is only you and your spouse and start making plans.Good
searching ahead!
I have the greatest dog in America, for sure, however she has one annoying habit:
She is given many things, but always seems to get more than was given.  No she is
not a typical Schnauser.
Being today is election day I realize it is a great day to write this blog, which I have wanted to write for almost a year.  After having breakfast a thought came to me and
I am moving on it.  Who besides my beloved dog takes more than she is given or makes me bend the rules for what she wants: food, a walk, a car ride, my dinner, etc.  The other culprits who live this way are our Congressmen or women and the Senators. Also a select few who work for the government and know how to take some
trinkets from the monies that flow through our Capital.
The elected officials have a different modus operandi to accomplish their desires.  It is called “official business of those who run the United States of America”.  The three
main things are their pensions, their healthcare and the right to ignore any of the bills we have to live with.  Example of their position:  We, the people, have Medicare
and they have private care; we have Social Security and they have real; security with
their pensions.   When it comes to the law(s) they make  we must follow to a tee. The only thing they do with a tee is put a golf ball on it to hit it further. These three bonuses are for the people of this country and the people who run this country. The later group
would be fine if they were fair and equal with ours; but they are not.
It is my contention that the three benefits are one of the several reasons they seek
the jobs of congressman or senator.  Medicare is always being adjusted down and becomes more expensive over the years.  Private care stays the same or better.
When the government is short of money they always think of cutting social security
which belongs to the people who paid in with after tax dollars.  Their real security is
a benefit which is not touched, as social security is, when anything, including a crisis arises.
The last benefit is the “Do As I Say Rule”,(butnotasIdo!)  It is easier to make laws that
would not affect those making them happen, and now you know why.  Make the elected people lose their benefits and live with ours and half or more of these public servants would quickly quit their posts.
A little side note that I found interesting!  The people and companies that work for the
Government owe the IRS over $3.5 billion for their 2015 taxes.  Our elected officials also owe the Government a pile of money from not paying their taxes on time.
Better than all of the above the Government owes the seniors in this country a plethora of interest on their accumulated social security savings that probably hasn’t
been paid for decades.  Oh well, easy come and easy go!
Well, if your ready send me some ideas of what you think has happened and how
we should go about fixing it. Together we can “right the ship”
 (  Generally takes two types of loans  )
The mortgage industry is certainly not new but it has been changed, and not necessarily to make it easier for borrowers.  In my opinion too many politicians without much experience
have tried to make over the industry and haven’t come close to making it one iota better.
They have changed the requirements that are needed for the borrower to qualify for the loan.
If they do what is asked of them and meet the new qualifications they will easily get the loan but can just as easily lose the house if the economy weakens and works against the borrower.
Here is the problem: the requirements are upside down.  There are 4 requirements and the
two top ones are the most important. The lenders want to see good earnings from the borrower(s) and secondly good credit.
I want to see a lower (60% or less) loan to value when the loan is approved and sufficient
reserves for 18 months of total obligations in the bank, or in other liquid investments. I am
sure that my way should be the one and only way, especially after seeing the damage from the last recession that way to many borrowers sustained.
In the recession not only did high paid employees lose their job, but many large companies close their doors for good and all of the workers lost their job.  Being the store manager with a healthy salary and pension didn’t save these people from losing their houses and other
possessions because they felt they were well protected.  They were, until everything went
down the drain.
If you have a low loan to value and trouble comes there are private lenders that will give you
loans if there is a way to pay the loan back.  They will do this because there is plenty of equity so the lender can recoup the loan.  The fact that you have good liquid asset reserves
is also a protection that unfortunately, most borrowers do not have.
The answer to the banks is do it their way but take a quick pay back of the loan.  You should
take a 15 year loan or less. This will build you sufficient loan to value to help you through
hard times.  If you don’t do that you should take a very low payment on a variable loan and
keep the payment low so you can put money into the bank for a crisis.  I prefer the 15 year loan but if you can’t make it work do the other.
Once you realize that your equity and your money in the bank is better than anything else
you are ready for either of the requirements.  Don’t ever quit putting away money and
improving your property to get a higher loan to value.
There is nothing better!