"Loan Rates Fall to 30-Year Low"
Washington Post (09/19/98) P. MG1; Haggerty, Maryann

Average 30-year mortgage rates fell to 6.66 percent last week, causing a surge in mortgage applications, according to Freddie Mac. Applications were up 80.2 percent from a year ago, and refinancing accounted for 55.4 percent of all mortgage activity, according to the Mortgage Bankers Association. As a result of the market, this may be a good time for homeowners to refinance their current mortgage, but before deciding to do so, it is best for homeowners to review their situation. Some people refinance to cash out their equity, others attempt to pay their mortgage quicker, and others are simply taking advantage of low rates, which could rise in the future. But for homeowners who last purchased a loan in 1993, the last time the market experienced similar conditions, there may not be a need to refinance. The best thing for homeowners to do is review their individual situation and decide how long they plan to live in the home. Homeowners can check with their current lender and other lenders and can also use the Internet to decide how their payments will be affected if they refinance. Some factors to consider include points, which shouldn't be an issue with today's low rates, closing costs, the term of the loan, and the size of the loan.

"A Simple Strategy for Expanding Small Spaces in Your Home"
Washington Times (09/18/98) P. F21; Friedman, Rosemary Sadez

There are a number of strategies that home owners can employ to give them more room space. For instance, Rosemary Sadez Friedmann, a member of the American Society of Interior Designers, says that if the dining room seems to be too small, homeowners should consider purchasing a 42-inch round table that seats four people, instead of a 48-inch table. A similar course of action would solve a problem with a small kitchen. Friedmann says that a table with a width of 30 inches and a depth of 32 inches can be built into a wall where the width of the space is at least 42 inches and where the depth is also at least 42 inches. And if the problem area is the living room, Friedmann says that homeowners should consider using two love seats and one chair, with a cocktail table and one end table, instead of the typical set-up of a sofa, love seat, a pair of chairs, and several tables.

"Lanes Helps Low-Income Buyers"
National Mortgage News (09/07/98) Vol. 22, No. 50; P. 49

Rich Lanes, owner of Blossom Valley Mortgage and president of the San Diego chapter of the California Association of Mortgage Brokers, says he has found many of his low-income clients through referrals from other borrowers. Low-income borrowers with average incomes of $25,000 account for 20 percent of Blossom's business, and borrowers receive loans between $40,000 and $130,000. The homes purchased with the loans are divided between condominiums and single-family homes, and the loans are typically 30-year, fixed-rate loans. Lanes says most of his borrowers have sufficient incomes, but have trouble making downpayments. For these borrowers, Lanes offers downpayment assistance programs, which have helped almost a third of his borrowers.

"Condo Owners Win Battle"
Crain's Cleveland Business (09/07/98) Vol. 19, No. 36; P. 9; Bullard, Stan

In a case that could affect other northern Ohio communities, as well as all condominium owners, the Woodhawk Club Condominium Owners Association has won a lawsuit against the city of Mayfield Heights, outside of Cleveland. Under the suit, U.S. District Court Judge James Gwin ordered the city to provide refuse collection to the association and to cover the cost of collection since the lawsuit was filed. The city normally collects refuse only for single-family homeowners, but the association argued that this policy violates the Constitution because it treats condo owners different from single-family homeowners, even though both pay property taxes. Mayfield Heights will likely appeal the ruling, and Mayor Peg Egensperger says the properties agreed to conduct their own refuse collection when they were built.

"Department of Housing & Urban Development"
Moneysworth (08/98) Vol. 4, No. 8; P. 6

As many as 60,000 homeowners stand to receive about $1,000 each from the Department of Housing and Urban Development (HUD). These home owners have overpaid on their mortgage insurance premiums payments that were made on home loans backed by the Federal Housing Administration. For more information, call (800) 697-6967, or point a Web browser to the HUD Internet site located at www.hud.gov.

"More Than Ever, There's No Place Like a Second Home"
Money (09/98) Vol. 27, No. 9; P. 176; Chatzky, Jean Sherman

Last year's Congressional changes to the capital gains tax laws mean that homeowners can save money when purchasing a second home. Most banks already allow homeowners to take out mortgages of up to 33 percent of their income, which, coupled with low interest rates, can result in significant savings for homeowners. But there are important factors that go into choosing what type of second home to purchase, as well as where and when to purchase the home. People interested in buying a pre-retirement home can do so while living in their primary home. After spending a couple of years vacationing in the home, they can then sell their old home at capital gains tax exemptions of up to $500,000 for married couples. These homes should be purchased in well-populated areas with good health care systems. Vacation homes are also popular, and the best time to buy these is after the tourist season, because this is when the seller is most anxious to get rid of the home. Buyers of these homes should look for areas with high tourist rates, and the homes should resemble permanent homes. A second home can also be considered a rental property if the house is used by the primary homeowners less than two weeks during the year. One more option for homeowners is time-share properties, which tend to have a bad reputation. These homes may be sold at a loss, but they count as second homes and are therefore tax-deductible.

"From the Ground Up"
Home (09/98) Vol. 44, No. 7; P. 162; Best, Don

Geothermal heat pumps are finding their way into new homes that are not always high-end or custom-built. For instance, the geothermal systems--heat pumps that turn the earth into a natural heat source during the winter and a natural heat sink in the summer--can be found in the Dallas community of Hillside Oaks, where the 1,100 square foot to 1,600 square foot homes range in price from $60,000 to $82,000. For home buyers, the benefit of having the home work off of a geothermal system is that within two to three years, the $2,500 cost of the system will be recouped. At the same time, homeowners can expect to have lower utility bills. Hillside Oaks homeowners Joe and Jean Cabrero say that their electric bill in their two-story, four bedroom is a third less than their old home. "Joe and I had heard about geothermal systems before, but we thought they only came with two- and three-hundred-thousand-dollar houses," said Jean. "It's a godsend, really, that they're starting to become available to people of modest income who have to worry about utility costs." Geothermal systems reduce heating bills anywhere from 30 percent to 70 percent, and reduce cooling costs anywhere from 20 to 50 percent.

"Home Office Slowdown?"
American Demographics (09/98) Vol. 20, No. 9; P. 44; Klein, Matthew

The number of home offices in the United States may be dropping slightly, depending on what is considered the definition of a home office. Almost half of all home offices are used exclusively for personal business, according to Wirthlin Worldwide. Using this definition, about 31 percent of Americans have a home office, which is similar to the figures of 1996, indicating the trend toward home offices may be slowing. Computer manufacturers may also start marketing their existing products rather than developing new ones, another sign that the market may not be growing. But the use of computers in home offices for non-personal business may be growing. About 74 percent of people say they use a home office for personal business, and 26 percent use it for home-based businesses. This trend is also affected by the fact that offices are slowly adapting to the idea of employees working at home.

Published: September 21, 1998

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