The SPOON FEED - Sage advice in terms you can understand.

To Rent or Not to Rent

Today’s market shows that really no matter where you live, you are likely to have renters interested in your property. People are utilizing sites like VRBO and Airbnb in record numbers, but there are plenty of things to consider before putting your space up for rent this season.

Know the rules.
First and foremost, it’s important to make sure that renting your home falls within the specific guidelines and regulations in your state and county. These rules vary greatly depending on what part of the country you are in, so you’ll need to make sure you are following protocol.

Clear your schedule.
Preparing your home for rental can be time-consuming to start, but once you get in the swing of things, it shouldn’t involve too much time and energy on your end. Some of the basic tasks you will need to consider are advertising, responding to inquiries, handling taxes, managing maintenance, and hiring service people (e.g. housekeepers and handymen).

Market your home.
Getting renters to want to stay in your home shouldn’t be difficult, so long as you know what people are looking for. When searching for a vacation property, most people consider its proximity to popular attractions, accessibility and size, available dates, and cost. Be sure to check the going rates for other rentals in your area, and focus on advertising your space’s closeness to must-do activities, fine dining, and kid-friendly spots.

Make it stand out.
Your home will likely be up against hundreds of other rentals, so you’ll want to make sure to emphasize special deals and amenities. If you have things like a pool, an HD television, a large movie collection, or beach equipment in the shed, you will want to highlight it so you let potential renters know that your space is one of the best!

Protect yourself.
Anytime you open your home to strangers you, are leaving your personal property and belongings in the hands of others, and, accidents do happen. If you plan on renting your space for an extended period of time, it’s a good idea to consider taking anything valuable with you or placing it in storage. It might seem like a pain to have to remove these things, but it’s worth the hassle to prevent damage or added expenses later.




“Your HELOC is resetting” is a phrase you might be hearing a lot these days, and it sounds like something that might send your spaceship off its trajectory. But, if you're not careful, it’s actually something that could send your budget off course.

The financial field is experiencing a perfect storm as multitudes of a popular financial product, the home equity line of credit, or HELOC, are coming due.

Why now? Well, homeowners rushed to take out HELOCs in 2007—just before the housing crash, when property values were at a peak. That gave homeowners flexibility to tap into much-needed funds during the rocky economic period of the past decade. But many of those HELOCs "reset"after 10 years, and with rising interest rates (just last week, the Fed announced another crucial rate hike), the mortgage math doesn't look good. Your monthly payments could go higher—some by substantial amounts.

Let's take a look at how you can deal with a resetting HELOC without busting your budget.

Why has my HELOC bill ballooned?

If you're reading this, you probably already know what a HELOC is. But if it's been 10 years since you reviewed your paperwork, here's a refresher: A HELOC is a loan that allows you to borrow money against the equity you have built up in your home. Your lender figures out how much your house is currently worth, deducts what you still owe and offers you a percentage of the remainder as a loan.

What many borrowers don’t understand very well is that unlike their primary mortgage—whose interest rate is likely locked in for 20 or 30 years—a HELOC has a variable rate after the first 10 years. That variable rate is typically tied to the prime rate, which serves as a benchmark for lending rates. The prime rate increases when the Federal Reserve raises short-term rates.

HELOCs typically require interest-only payments for the first 10 years, after which payments on the principal kick in. So there's a double whammy for homeowners who took out a HELOC in 2007: Not only are their principal payments coming due, but the rate on the loan is also poised to spike.

Now, we're not trying to cause a panic; despite predictions that mortgage rates would rise throughout the year, they're still historically low. The average rate for a 30-year fixed mortgage (the most popular home loan) is currently hovering at a seven-month low, despite several increases to interest rates since December. The Fed just hiked interest rates again, though, so the mortgage market could see some of that long-anticipated fallout.

How to handle a HELOC reset

This situation doesn't have to be a disaster. You just have to do your homework to make the decision that's best for your budget.

First—and most important—make sure you're reading the correspondence from your lender and monitoring your statements each month so you’re not caught by surprise, warns Elizabeth Mitacchione, vice president of mortgages for Teachers Federal Credit Union, in Hauppauge, NY.

Evaluating your options could take some time, so you want to be clear on how and when the rate will change.

If your HELOC is poised to reset, you essentially have three choices: Pay it off, refinance it, or stay in your HELOC.

Option No. 1: Pay it off

Maybe you've been quite conservative when using your HELOC. It could be that you’ve just been spending a small amount of extra cash to spruce up your outdoor area or fix that leaky roof. Now that the project is done, you might well have the cash available to pay off your HELOC in one fell swoop. Done.

Option No. 2: Refinance it

Sorry, refinancing a HELOC isn’t cut-and-dried. You have three choices for how to handle it.

  1. Refinance into another HELOC: It's a good time to look into this option, as many local banks and credit unions are currently very competitive with their rates, says Jesse Johnston of Philadelphia-based HOW Properties. HELOCs offer a variety of benefits, including the absence of closing costs and mortgage insurance, notes Joe Talmadge, vice president of mortgage lending for Northwest Federal Credit Union in Herndon, VA. However, he adds, “over time, the risk of having a large balance on a variable-rate loan with little protection from potentially rising rates could lead to more uncertainty than many people are comfortable with.” Also keep in mind that a new, comparable HELOC might not be possible if your home’s value has dropped over the past decade.
  2. Refinance it into a second mortgage: Many banks will allow you to convert your HELOC to a fixed-rate second mortgage without going through the process of requalifying for the loan all over again, Johnston says.
  3. Consolidate your first mortgage and HELOC into one: You may decide to do a full refinance of your first mortgage and HELOC while mortgage rates continue to be relatively low, Mitacchione suggests. Of course, that means you would need to pay closing costs, as well as go through the hassle of getting all your financial documentation together, notes Johnston.

Option No. 3: Stay in your HELOC

If you stay in your current HELOC, just remember that payment amounts will rise when the loan resets because you are no longer paying only interest. Your lender can walk you through the payment increase if you decide to just hold tight.

Article by Cathie Ericson

Tips for Summer Travel with Your Pet

The warm summer months call for some fun traveling with loved ones, however, trips can be less fun if four-legged family members aren’t able to come along. Pet parents already know not to leave pets in the car on a hot day, but there are other factors to consider when your pets are tagging along for the ride.

“Your pet’s safety and comfort while traveling are extremely important to help reduce stress for both the pet and owner,” said Jam Stewart, director of corporate communications at Mars Petcare. “Creating a safe space for your pet to travel not only shows responsible pet ownership, but also allows additional quality time for you and your furry best friend.”

Keep these tips in mind when taking your pet on vacation this summer:

  • Be sure your furry friend can join you in all areas. Unfortunately, not all accommodations love pets as much as pet owners do. Don’t forget to call ahead to the places you plan to visit to be sure your furry loved ones are welcome. It’s also imperative for owners to understand any rules for their pets at their destination, like keeping their pets on a leash. Making sure your pet is well socialized and comfortable visiting unfamiliar places also helps make the new experience fun and positive for your pet and for you.
  • Don’t forget your pet’s ID. Microchipping your pet is one of the most effective ways to ensure he or she can be reunited with you if lost. Combine it with on-collar identification tags and a GPS pet tracker, such as Whistle 3, which lets owners track their pets wherever their travels take them.
  • Make sure your pet is comfy on road trips. It’s important to introduce your pet to your car slowly before embarking on a long adventure. You can also bring your pet’s favorite toys, blankets or bed to help him or her feel more at ease. If your pet is still uneasy in the car, your veterinarian can provide options like essential oils, over-the-counter supplements or, if needed, prescriptions.
  • Don’t forget the treats. While traveling, make sure your pet has healthy treats for the long ride. Treats such as Greenies and Pedigree Dentastix promote fresh breath and clean teeth for dogs. For treats your cat will love, try Temptations, which offers tasty treats in multiple flavors.

“Pets make our lives healthier, safer and happier, and owners should take the time to plan properly before heading out on the road with their pets to ensure a fun, safe and comfortable trip for all,” Stewart said. “Pets are part of the family and we want them to enjoy the trip as much as we do in order to have more opportunities to introduce them to new experiences and places.”

4 Things Professional Burglars Don't Want You to Know!


 Even though a burglary occurs every 20 seconds in the U.S., you can still protect yourself with simple, common-sense steps.

1. Nighttime Burglaries Aren't the Best Time. Burglars like to break in to homes during daytime hours - between 12:30 p.m. and 2:30 p.m. - because there's a high chance people will be away at work or school. The last thing criminals want is to encounter someone at home. Don't leave your home unlocked just because it's daytime.

2. They Know When You're Not Home - Thanks to Social Media. Locating someone's home address using basic information from their social media profile is surprisingly easy. In one survey of convicted burglars, more than 10 percent say they used social media to determine who was out of town. So while it's tempting to post about your vacation to your social media feed, wait to share those trip photos until you're back home.

3. They Don't Like Your Security Practices. Burglars are looking for easy targets, so your basic security measures are pretty important. Unlocked windows, unused deadbolts, poorly lit homes, and residences without security systems are prime targets for burglars, so make sure you are using the security features you already have.

4. Your Landscaping Choices Can be a Burglar's Best Friend. Thieves are searching for crimes of opportunity, and landscaping gives them a place to hide while planning a way of entry can be very enticing. Tall bushes are favorites of burglars since they offer an obstructed view from the street and an easy way to hide from neighbors. Sometimes the best defense is a clear view of your front porch.

Brought to you by Cyndi DuMontelle.


What are the risks of buying a short sale or foreclosure? 


It’s more complicated than you think.

I’m looking to buy a new home, and I’ve noticed that there are a couple of “short sale” and foreclosed homes in the area where I’m interested in living. These homes are priced substantially lower than others, and I’m wondering what the catch is. I’ve heard that short sales or foreclosures often need repairs. What else do I need to know to decide whether to invest in one of these properties?

Purchasing a home through a short sale or a foreclosure process can be a way to get a good deal on a property. But it isn’t for the faint of heart. Both processes are likely to be more complicated than purchasing a home on the open market.

First, make sure you understand the differences between these categories. Both are used when a property owner is in financial distress and can no longer afford mortgage payments.

In a short sale, the proceeds from the sale will fall short of the debt owed on the property. Such a sale can only occur if the mortgage holder (usually a bank) has agreed to accept less than the amount owed on the loan.

In a foreclosure, on the other hand, the mortgage holder has repossessed the property and is trying to recoup its losses by selling the house for the amount still owed on the loan. That amount is typically still less than the market value of the home.

Here are some of the common issues you may encounter when buying a foreclosure or short sale.

Purchasing delays

If you’re considering buying a property listed as short sale or foreclosure, keep in mind a few things, experts say.

“The process for purchasing this kind of property may not be as easy as purchasing a home directly from a seller who is current on their mortgage,” says Colin McDonald, real-estate agent with Berkshire Hathaway HomeServices Blake in Delmar, N.Y.

For instance, it typically takes six to eight weeks to close on a normal home, McDonald says. But with a short sale or foreclosure, the property may not close for six months or even a year.

“[W]hen a property is being listed as a short sale or foreclosure, you’re no longer just dealing with the seller,” McDonald says. “A bank is now involved, and unfortunately, they only care about getting what is owed to them. They will drag the process on for as long as they like.”

Short sales can also take months to get lender approval. “The seller’s bank can make things very difficult, making the borrower jump through many hoops — hoops that can take a long time to navigate,” warns David Reiss, a professor of law at Brooklyn Law School who writes and teaches about real estate.

And in the end, the bank may respond with a counteroffer that doesn’t meet your budget or terms. “So you might wait for a long time only to be disappointed,” says Sep Niakan, owner of Condo Black Book, a leading condo search website in Miami and broker of HB Roswell Realty.

Additional risks

Foreclosed properties may be purchased through the open market with a real-estate agent or at a sheriff sale or county auction. In many cases, you will not be able to view the inside of the property before the purchase. “[Y]ou are essentially buying a property sight unseen,” Niakan cautions.

In addition to buying the property, you’re also purchasing any liens (or unpaid bills relating to the property), code violations, or title issues, Niakan adds. Do your research to find out what other costs may be associated with the home, and factor all those costs into your bid.

If you’re purchasing a foreclosure or short sale on the open market — rather than at auction — you’ll typically get a clear title or a warranty deed that guarantees that no other lienholders have claim to the property. You can also buy title insurance to protect yourself from any future title issues.

Extra work

When you purchase a short sale or foreclosure, you will likely need to reserve funds or energy for home repairs or improvements once the sale is completed.

“Keep in mind when you buy any foreclosure or short sale, these people were in financial distress, so expect to inherit a property that has had some sort of deferred maintenance, even if it looks good on the surface,” Niakan explains.

In most cases, foreclosures are sold “as is,” which means the owner or the bank does not plan to make improvements before the sale.

“The bank will typically allow you to conduct inspections, but that doesn’t mean they’re going to make any improvements to the red flags called out in the report,” McDonald says. “As it is, they feel you’re already getting the property for a great price.”

With short sales, the sellers usually still live in the property, so even if they’ve let some things go, it shouldn’t be in complete disrepair. With a foreclosure, the risk is higher that the property could be vandalized or trashed, McDonald says.

Potential additional fees

While the price of the home may be low, a foreclosure or short sale often comes with additional transaction costs. With a foreclosure, you may have to pay transfer taxes as well as any superior liens on the property. You may also have to pay an additional fee to the foreclosure company.

Typically, in a short sale, there is a negotiator involved who will require a fee, such as 2.5% of the purchase price, McDonald says. The buyer is usually required to pay this fee.

You also may have to pay back taxes or other past dues associated with the property. If you buy a condo-foreclosure, for instance, “there may be many years of past due condo association fees that may not appear anywhere in public record, and you might end up inheriting a very large debt,” Niakan says. “Some local and state laws limit the amount you would be responsible for in those cases, but do your homework.”

Purchasing a home at a price that is significantly below market always sounds like a good thing — and it can be for the right person. But keep in mind that if the property is really great, “there will be others who will also be interested in it,” McDonald warns. “This includes veteran investors who have deep pockets of cash.”

If you hope to get a great home for a low price through a foreclosure or short sale, be sure to do your homework and be aware that it may take a long time and come with extra costs and repairs. And at the end of the day, buying a short sale or foreclosure isn’t for everyone.

“While you may get a good price, you will be paying for the house with uncertainty, delay, and frustration,” Reiss says. “You’ll need to determine for yourself whether it is worth it.”

Article By Nancy Mann Jackson