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John Riggins
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Forced Savings...Really? -
Part of the American Dream is to own a home. A home is a place to call your own; a place to raise your family and share with your friends. A home is a place to feel safe and secure. A home is a good investment?
Work hard, buy a home, start a family and continue to upgrade your home until everyone has enough room. This has been the blueprint for lots of homeowners for the last fifty years but there is certainly a shift in thinking that could change all of that.
Interestingly, Americans live in much larger homes than most people in other countries throughout the world. The U.S. Census reported in 2006 that the average single family home completed had 2,469 square feet which was 769 feet more than in 1976.
Once the children are grown and have moved out, homeowners are finding they have too much room. Even if their home is paid for, they have higher property taxes, insurance, utilities and maintenance on the larger home than they'd have if they were living in the "right size" home.
Some homeowners state that they're keeping their larger home because it has luxury features that smaller homes don't have. There's a movement that seems to have started in the United States to find the "right size" home with the amenities and convenience that homeowners want.
This philosophy has been expressed by Sarah Susanka in her book Creating the Not So Big House. It proposes a house that "values quality over quantity with an emphasis on comfort and beauty, a high level of detail, and a floor plan designed for today's informal lifestyle."
What do they want? What do they need? Will it fit? Do they already have one? These are the common thoughts running through our minds when trying to find the perfect gift.
The gift of really listening with no interrupting, no daydreaming and no planning your response is 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 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.
You don't have to be Dorothy in the Wizard of Oz to feel like there's no place like home.
Home is a place to call your own. It's a place to raise your family and share with your friends. It's a place to create memories. A home is a place to feel safe and secure.
Inspect all of your decorations and electrical lighting before using them. While you're enjoying the holidays this year, it's important to pay attention to some of the things that may affect your safety.
Here's hoping your time at home is special during this holiday season. Please let us know if there is anything we can do for you.
Consumers are vigilant about buying opportunities like Black Friday, Small Business Saturday and Cyber Monday along with sales, coupons and rebates. Some cautious buyers will even risk shopping early to find exactly what they want to waiting until the last moment for potentially lower prices.
In retail, the hype is more obvious and the signs may be easier to read than that of the home market. Certainly, volumes have been written about the record low mortgage rates and that home prices have adjusted considerably lower in the last four years.
A more subtle indication of a home buying bargain is that statistics indicate that year-after-year, the average home prices fall in the fourth quarter. The holidays beginning with Thanksgiving, winter weather and the distractions of gift purchases certainly contribute to lower home sales.
Regardless of what is causing the reduced volume, the smart buyer can take advantage of the end of the year to get their best possible deal on a home purchase. The buyers willing to buck the trend could easily benefit from lower prices and less competition from other buyers.
You are invited to stop by the Kapolei Safeway on Friday, December 9 between 2pm to 4pm to contribute to the Salvation Army. My son, Ryan, and I will be ringing the Salvation Army bell.
Ever since I was a young child I remember the Salvation Army ringing the bell before Christmas to raise funds to give to the needy. But it’s not just at Christmas that the Salvation Army helps. Whenever there is a natural disaster, a fire in a home or some other catastrophic that event takes place, the Salvation Army immediately responds to help provide clothing, shelter, food and counseling.
At this time of year when we give thanks for all of our blessings and our good fortune, let’s not forget those in need. I urge everyone to give to the Salvation Army. If you are unable to stop by on Friday, send a donation to the Salvation Army.
http://www.salvationarmyusa.org/usn/www_usn_2.nsf
No one wants to pay more than its value regardless of the product. When you buy bananas for 49 cents a pound at one store and see them for 39 cents a pound at another store, it's not the ten cent difference as much as it is about overpaying.
It seems like the natural way to start the negotiation process is to offer less than the asking price for the home. However, instead of the price, a buyer could negotiate condition, timing or terms. A few thousand dollars off the price may not make much difference in the monthly payments but it might make a big difference if it was negotiated in one of the other areas.
A buyer who only has enough available funds for down payment and closing costs will have to live in a home exactly the way it is for some time. They may not be able to make the changes that would really make it feel like home until they've saved more money.
Let's say you found a home that needed $5,000 worth of improvements and the seller would lower the price by that amount. Financing those improvements with a separate bank loan will result in higher payments due to a higher interest rate and shorter term than your mortgage.
Offering full price and asking the seller to make the improvements will result in lower monthly payments based on today's low mortgage rates and 30 year term. Another alternative is to negotiate with the seller to pay your closing costs so you'd have the cash to make the improvements.
Paying full price may cause the seller to consider concessions regarding condition or terms which can be balanced to affect the value of the property. Buyers can and should negotiate to acquire the home that meets their needs at the lowest possible cost of housing.
Article From BuyAndSell.HouseLogic.com By: G. M. Filisko
A solid game plan can help you narrow your homebuying search to find the best home for you.
House hunting is just like any other shopping expedition. If you identify exactly what you want and do some research, you'll zoom in on the home you want at the best price. These eight tips will guide you through a smart homebuying process.
Understand the type of home that suits your personality. Do you prefer a new or existing home? A ranch or a multistory home? If you're leaning toward a fixer-upper, are you truly handy, or will you need to budget for contractors?
List the features you most want in a home and identify which are necessities and which are extras. Identify three to four neighborhoods you'd like to live in based on commute time, schools, recreation, crime, and price. Then hop onto REALTOR.com (http://REALTOR.com) to get a feel for the homes available in your price range in your favorite neighborhoods. Use the results to prioritize your wants and needs so you can add in and weed out properties from the inventory you'd like to view.
Generally, lenders say you can afford a home priced two to three times your gross income. Create a budget so you know how much you're comfortable spending each month on housing. Don't wait until you've found a home and made an offer to investigate financing. Gather your financial records and meet with a lender to get a prequalification letter spelling out how much you're eligible to borrow. The lender won't necessarily consider the extra fees you'll pay when you purchase or your plans to begin a family or purchase a new car, so shop in a price range you're comfortable with. Also, presenting an offer contingent on financing will make your bid less attractive to sellers.
Do you have blemishes on your credit that will take time to clear up? If you already own, have you sold your current home? If not, you'll need to factor in the time needed to sell. If you rent, when is your lease up? Do you expect interest rates to jump anytime soon? All these factors will affect your buying, closing, and moving timelines.
Your future plans may dictate the type of home you'll buy. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in the home for five to 10 years? With a starter, you may need to adjust your expectations. If you plan to nest, be sure your priority list helps you identify a home you'll still love years from now.
Ask people you trust for referrals to a real estate professional they trust. Interview agents to determine which have expertise in the neighborhoods and type of homes you're interested in. Because homebuying triggers many emotions, consider whether an agent's style meshes with your personality. Also ask if the agent specializes in buyer representation. Unlike listing agents, whose first duty is to the seller, buyers' reps work only for you even though they're typically paid by the seller. Finally, check whether agents are REALTORS®, which means they're members of the NATIONAL ASSOCIATION OF REALTORS®. NAR has been a champion of homeownership rights for more than a century.
It's OK to be picky about the home and neighborhood you want, but don't be close-minded, unrealistic, or blinded by minor imperfections. If you insist on living in a cul-de-sac, you may miss out on great homes on streets that are just as quiet and secluded. On the flip side, don't be so swayed by a "wow" feature that you forget about other issues-like noise levels-that can have a big impact on your quality of life. Use your priority list to evaluate each property, remembering there's no such thing as the perfect home.
It's natural to seek reassurance when making a big financial decision. But you know that saying about too many cooks in the kitchen. If you need a second opinion, select one or two people. But remain true to your list of wants and needs so the final decision is based on criteria you've identified as important.
Both GSEs have posted details of the program modifications and procedural changes on their respective business sites for mortgage servicers to follow (Fannie’s,Freddie’s).
Among the key program revisions, the GSEs have eliminated or raised the loan-to-value (LTV) cap, and relaxed representation and warranty stipulations – changes that officials expect to at least double the number of homeowners with a HARP-refinanced mortgage. Since the program was launched in 2009, just under 900,000 borrowers have participated.
Negative equity typically excludes a homeowner from refinancing through traditional channels. Removing previous LTV ceilings will allow homeowners who are severely underwater due to plummeting property values to take out new loans at today’s lower interest rates. There are, however, some LTV conditions depending on loan type.
There are no LTV restrictions for fixed-rate mortgages with terms up to 30 years, including those with terms of 15 years.
For fixed-rate loans with terms between 30 and 40 years,LTV is limited to 105 percent. Likewise, a 105 percent LTVcap has been placed on adjustable-rate mortgages (ARMs) with initial fixed periods of five years or more and terms up to 40 years.
Any borrower with an LTV ratio below 80 percent is not eligible for HARP.
As previously announced, across the board, the original mortgage must have been sold to Fannie or Freddie prior to April 1, 2009.
In the October notice announcing their intent to modifyHARP to increase participation, the GSEs said they would “waive certain representations and warranties” on loans refinanced through the program. Analysts said at the time
that depending on what exceptions would be made, such a move could spark increased competition among lenders to refinance borrowers through HARP.
In Tuesday’s guidance, the GSEs provided specifics on which liabilities would be lifted and noted that the rep and warranty adjustment is one of the most important components of the new program.
The lender will not be responsible for any of the representations and warranties associated with the original loan.
The lender is also relieved of the standard underwriting representations and warranties with respect to the new mortgage loan as long as the data in the case file is complete and program instructions are followed for collecting information on income, employment, assets, and fieldwork.
The lender is not required to make any representation or warranty as to value, marketability, or condition of the subject property unless they obtain a new appraisal.
Lenders will, however, be held accountable for any fraudulent activities.
Administration officials are hoping that eliminating the risk associated with reps and warranties – whether transferred from the original loan or on the new loan – will spark healthy competition among lenders to help homeowners get into the program. And Fannie and Freddie are making it easier for the competition to flourish.
The GSEs are modifying their policies to allow lenders to solicit borrowers with Fannie- and Freddie-owned mortgages for a refinance. The only condition is that the lender “simultaneously applies the same advertising and solicitation activities” to borrowers of both GSEs, and for loans both owned or securitized by the GSEs.
In the new guidelines, the GSEs detail specific language that must be included in any borrower solicitation material.
Regarding program eligibility as it relates to delinquencies, the borrower must not have been behind on their payments at all within the most recent six-month period, and had no more than one 30-day delinquency within the last year.
The GSEs are also removing the requirement that the borrower (on the new loan) meet the standard waiting period following a bankruptcy or foreclosure. The requirement that the original loan must have met the bankruptcy and foreclosure policies in effect at the time the loan was originated is also being removed.
The new HARP program has been extended through December 31, 2013.
Property tax exemptions in peril as panel tries to make system fair
Members of a city advisory commission want to end levy breaks for homeowners as well as for schools, churches and charities
By Rob Perez
POSTED: 01:30 a.m. HST, Nov 14, 2011
An independent review panel is leaning toward recommending that the city abolish property tax exemptions for roughly 150,000 Oahu homeowners, including the blind, elderly and disabled, as part of a major but controversial effort to bring more fairness, efficiency and accountability to the tax system while generating additional revenue for city services.
The Real Property Tax Advisory Commission also is leaning toward proposing to the City Council that exemptions for charitable organizations, credit unions, schools, churches and other groups be eliminated or substantially pared.
The reforms being discussed are meant to provide tax relief that is more closely linked to a landowner's ability to pay rather than giving such breaks simply because one belongs to a particular category, such as homeowners or disabled veterans, according to the commission's chairman, Lowell Kalapa, who heads the Tax Foundation of Hawaii. The reforms also would more equitably spread the burden of funding city services, he said.
The commission, formed by the Council in the wake of several recent property tax controversies, has been meeting since August to discuss ways to reform the system. Despite the potential impact of what's being considered, the discussions so far have drawn little public attention.
But that's likely to change once the panel makes its recommendations to the Council before the end of the year.
Politically influential groups that have long benefited from the exemptions — many have been on the books for decades — are expected to intensely lobby the Council, arguing that the tax breaks are justified. And with five of the nine Council seats up for election next year, the chances of anything especially controversial passing are slim, some say.
Kalapa, a tax policy expert, acknowledged the political storm that could be created but said the commission's task was to propose ways to improve the system without regard for political consequences.
"We were created to take the political heat off elected officials," he said.
Council Chairman Ernest Martin said he expects the commission's recommendations to get serious consideration by the Council, and agrees that some exemptions are obsolete and should be eliminated. But he said he doubts the Council would support abolishing the homeowner exemption.
"No doubt, it'll be very contentious," Martin said.
The main focus of the advisory commission thus far has been the 40-plus property tax exemptions that economist Paul Brewbaker, vice chairman of the panel, described as a "gobbledygooky hodgepodge with seemingly no rational pattern."
The exemptions, amounting to roughly $100 million in lost revenue annually, cover a range of categories, from slaughterhouses, crop shelters and for-profit child care centers to historic homes, cemeteries and foreign consulates.
"I had no idea how complex and convoluted some of these things were," said Brewbaker, who questioned the need for any exemptions.
ELIMINATING the homeowner exemptions, claimed by more than 144,000 owners and amounting to nearly $50 million in lost city revenue annually, is the most controversial proposal being discussed. The main exemption reduces the taxable value of a residence by $80,000, saving occupant homeowners who apply $280 a year based on current tax rates.
Additional exemptions are permitted if the homeowner is 65 or older, blind, deaf, a disabled veteran or in a variety of other categories.
Kapolei homeowner and Realtor John Riggins said eliminating the standard exemption wouldn't be fair because many homeowners made their retirement plans partly based on the tax breaks. He also said removing the exemption would exacerbate Hawaii's already serious housing affordability problem.
"I just don't think that's a good idea at all," Riggins said.
But Kalapa and other commission members questioned the fairness of giving tax relief without regard to one's ability to pay, noting that multimillionaires living in mansions are getting the same breaks as homeowners living in modest homes struggling to pay their bills.
Kalapa also questioned the fairness of homeowners getting tax relief while renters — who make up nearly half of Oahu's households — get none.
"There is no equity for people who don't own their own homes," he said.
Similarly, some commission members noted that wealthy nonprofits pay the same $300 minimum tax for parcels valued at more than $100 million as cash-strapped nonprofits owning small patches of land assessed at fractions of that value.
Property taxes generate the bulk of the city's revenue and are used to pay for fire, police, ambulance and other services.
The idea behind the reforms is that everybody uses those services, so everyone should pay their fair share, with adjustments made for those who can't afford their tabs or those who provide services that benefit the city, Kalapa said.
"If you don't pay for it, then someone else does, subsidizing your share," he added.
And if people forgo paying their fair share, they still get the same level of city services, but the accountability link — making sure taxpayer dollars are spent wisely — becomes obscured because they aren't footing the bill, according to Kalapa.
For homeowners who can't afford their property taxes, the city has a low-income tax credit program that reduces the tab, assuming the homeowner meets the eligibility criteria. If the exemptions are eliminated, Kalapa said, that program can provide relief for those in need.
The commission was not asked to consider the city's budget challenges in coming up with recommendations, but panel members understand that eliminating exemptions will result in more tax revenue.
"We're keenly aware of the fact that there's a $100 million shortfall," Kalapa said.
While the commission is not evaluating the city's property tax rates, some members say the Council should consider lowering the residential rate in conjuction with eliminating the homeowner exemptions.
Natalie Iwasa, a certified public accountant and member of the commission, described the current property tax and exemption system as a mess that needs to be overhauled.
Holly Huber, a database specialist who has been examining the city's system for more than a year, said she continues to find numerous errors or inaccuracies because of a lack of oversight.
"Every time I look at something, I just shake my head," she said. "I can't believe what a nightmare it is."
She noted, for instance, that the city assessed the land for Punahou School's 74-acre campus at only $37,000, while ‘Iolani School's 22-acre parcel is valued at $105 million.
City Budget Director Mike Hansen explained that assessments for tax-exempt property owned by nonprofit groups, including schools, have not been a top priority because those organizations pay only $300 regardless of the value of their parcels. The city has focused its limited staff on taxable properties, he said.
That would have to change, though, if one of the proposals under consideration by the commission is adopted. According to the proposal, only nonprofits with a 501(c)(3) designation would be eligible for an exemption, and the relief would be based on a percentage of the value of the organization's parcel.
Commission member Lisa Maruyama, president of the Hawaii Association of Nonprofit Organizations, said land values don't reflect an organization's ability to pay, given that some nonprofits are land rich but cash poor. She opposes changing the existing nonprofit exemption.
Kalapa acknowledges that whatever the commission decides, the proposed changes will face tough going at the Council. "People won't like what we're going to say, but at least it'll be out there for people to talk about and debate."
