ARMS – better than a fixed rate mortgage?

Not that long ago, when mortgage rates were commonly 10% or higher, ARMs were looked upon as a more favorable type of mortgage. (At that point, if the ARM was going to adjust, it was going to go lower, not higher, so adjusting was a good thing.) Historically, unless you were locking in during a time of extremely low interest rates (like now), an ARM would be your best bet over time. Sounds crazy now, what with all of the subprime mortgage fallout, but its true.

The cost of the housing market “correction”

A few days ago I used several online calculators to get estimates of the value of my house. Most were simple online calculators, but one, from HouseValues.com, arrived in my inbox, sent by an actual human being — a realtor to be exact. He sent three comparables — recent sales in my neighborhood, all of which were priced $10,000 to $20,000 below what I paid for my house a few years ago, and an estimated range of $219,900 to $234,900.

Four years ago, I bought my house for $230,000. A year later, it was appraised for about $280,000. So this was unhappy news, even though I saw it coming.

Competition for the zestimate – there are other online home value calculators

I’ve been using zillow.com to watch the value of my home slowly decline over the past couple of years… luckily, since I’ve been paying down the principal on my 30-year fixed mortgage as well as my home equity line of credit, I haven’t seen my “zestimate” (Zillow’s home value estimate) dip below what I owe. It’s come down by about $60,000, though, from what my appraisal was when I refinanced a few years ago. Such is the current housing market.

For comparison’s sake, lets see how my home value stacks up on a few different (free) sites

Home sellers are the ones giving incentives now…

It wasn’t long ago that it was the landlords offering incentives. With the housing market as soft as it is, renting has been looking more attractive every day. Where I am, landlords have stopped offering (as many) incentives, and rents have edged up, while vacancy rates have gone down. While a few years ago, everyone I knew was in a mad dash to become homeowners, the situation is now the reverse.

(Almost) Free Houses in Detroit

For the fearless investor who’s on a very (very) long-term schedule, it seems that there’s a big opportunity out there just waiting to be snapped up… If you search for homes for sale in Detroit, Michigan, you’ll find that there are 22,387 homes for sale right now, and if you search for Detroit homes for sales between $0 and $20,000, you’ll find that there are 3,431 homes for sale in that price range!

Subprime-mortgage crisis government aid…a handout? or a safety?

I was talking with some friends last night about how the government is bailing out people who “bought way more house than they could afford” on an adjustable rate mortgage. At first we were all united against it — after all, we were all responsible homeowners, watching our budgets, paying our bills on time. We were all on 30-year fixed mortgages in modest houses that we can afford. Why should these people get extra aid that we don’t? Where’s our reward for being responsible? If the government is handing out money, shouldn’t we get some too?

It’s official, I am an armchair real estate investor

After all of my speculative talk about buying the duplex next door, four months later, it’s still for sale. Still vacant, too. AND, when I came home from work today, its front door was adorned with a lovely blaze-orange sign notifying the would-be residents that the water will be shut off soon. No buyers in sight, AND, the owner apparently isn’t paying his bills, either. (How much could the water bill really be in a vacant house?)

Oh, the fraudulent tenant from overseas scam…

Annie spencer will be moving to my very specific (yet undisclosed) city/state! She saw my nonexistent for-rent ad! Sounds like it must be for one of those scam deals where they send you a big deposit on the apartment, then ask you to wire a portion of it back (because some emergency takes place), and then only after you’ve done that do you discover that their original check was fraudulent…

Why is the tap water yellow?

I have a complex and relatively unhealthy relationship with plumbing. I understand most of the basic concepts of plumbing, and have successfully replaced “modern” plumbing fixtures myself, however, my house is 107 years old, and when pipes and fittings are that old, that corroded, and haven’t moved in a hundred or so years, they get a little more difficult to deal with. Often, I simply don’t have the physical strength to get the old pieces off. I’ve learned that its best for my mental health to simply hire a plumber…

So, given that, whenever receiving an email from my tenants having anything to do with water, panic sets in (plumbers can be expensive, especially in an old house.) Tonight I received one with the foreboding subject line “water troubles.”

Using balance transfer checks and credit cards to your advantage

I’ve been known to take advantage of the deals that my credit cards give me, and use them to my advantage. A year ago, I refinanced my 9% (now 10%) HELOC to a fixed 2.99%, for a fee of only $135 using balance transfer checks from one card, and a balance transfer from another card.

Now, I have a new low-rate balance transfer offers on an existing credit card, and am planning on making a little extra money from mr. Visa.

The McMansion is (finally) falling out of fashion?

On Yahoo finance today, the feature article in the real estate section is on a topic that I have always loved to hate: the McMansion. Any inner-city dweller worth his/her salt has to loathe the McMansion on principle, after all. They’re big (wait, huge) and grandiose and impressive, sure. That and they’re brand new. But they’re also soooooo close together, crammed onto lots in character-less new subdivisions, and the building materials always seem slightly cheap to me. I have a feeling that they will not age quite as well as their Victorian predecessors. They seem a bit ostentatious and over the top to me, kind of like the gold lamé of housing.

Citibank is giving away $50 if you sign up for an online savings account. Who doesn’t like free money?

I was just paying my (sigh) credit card bills tonight (actually it’s not that bad, because they’re all fixed at 2.99% for the life of the balance), and saw an ad on the citibank page to sign up for an online savings account. They’re offering a 4.65%APY, which isn’t bad (although not as good as the 5.05% that I get at Emigrant), and if you sign up and fund an account, they’ll give you $50 for your trouble. Not bad.

Piggybacking for a higher credit score (and better mortgage rate)

I read an article on yahoo news today about piggybacking — getting added as an authorized user to the credit card belonging to someone with good credit to improve your own bad credit. Something that’s commonly done by parents (to improve their child’s credit), or spouses, but now being offered to strangers through internet-based services. These services claim to “improve your credit overnight,” and apparently it works(!)

Cashflow and the duplex next door

So, I’ve been biding my time, not really thinking too seriously about buying the duplex next door (but thinking about it, nonetheless). It went up for sale a month ago, and the sign is still there. I haven’t seen a great deal of activity there (both units are currently vacant), although they do periodically mow the grass (not really as often as they should when trying to sell the place, however.). All of this cashflow 101 playing has gotten me wondering a little more seriously about it…. and doing the math over again.