Which mortgage is right for you? 15 year or 30 year?

There's an interesting article in the Wall Street Journal today about the rise of 15 year fixed rate mortgages in the refinance market.

The 15 year VS 30 year mortgage battle is one that has simmered for a long time. To be honest, the battle has been pretty one sided, with 30 year mortgages being vastly more popular than 15 year. But 15 year are still around, so somebody has to be interested in them.

15 year mortgages, for those of you completely new to the mortgage business, is a home loan that you repay over the course of 15 years. Conversely, a 30 year mortgage is one you pay off over the course of 30 years.

That simple fact is the only difference between the two.

Well, if you're going to owe someone money, it's better to owe them for less time, isn't it? Especially if your interest rate is going to be a half point (1/2 of 1%), or more, lower!!

People LOVE that idea until they see the numbers.

Yes, with a 15 year fixed will pay off your loan sooner, and at a lower interest rate, but your payment is going to be 30%-50% HIGHER than the 30 year fixed.

That simple fact is why the 30 year fixed has ruled the mortgage industry for so long.

The WSJ article cites statistics from Corelogic that in the first 6 months of 2009 (Jan-June), the percentage of mortgage refinances that are 15 year loans increased from 18.5% in all of 2008, to 26%.

That's an increase of 7.5%.

Refinancing is a little different animal than purchasing when you're talking about mortgages though. The people who are doing refi's to 15 year loans are people who A) Have a good chunk of equity in their homes AND plan on remaining there for a long time B) Have excellent credit, and sizable cash reserves. Mainly, these are older people who have settled into their "last home".

But what about for purchasing? Is a 15 year a good idea for you? Yes!

IF you have really good credit and good, solid income.

IF you are planning on staying in your home long term. Did you just start a family, and plan on, and will be able to, stay in that home until the kids leave for college? Then a 15 year might be right for you.

But if you know that your time in a home is limited, lets say you know you'll only be in that location for 4-6 years, then look at a 30 year. Heck, look at an Adjustable rate mortgage. Contrary to popular sentiment at the moment, ARMs are NOT evil. They just got horribly misused by people caught in unfortunate circumstances.

At the end of the day though, the numbers really speak for themselves. Over the course of a 30 loan, at today's rate of 4.375%, you would pay $159,500 in total interest on a $200,000 loan.

Yes, you would pay almost 80% of the loan value in interest!! You've almost paid for the house twice!

On a 15 year, you would pay only $61,800 in interest at today's rate of 3.75%. That's not even 1/3 of the loan amount. Between the two, you'd save $97,700 in interest by going with the 15 year.

The downside? Your monthly payment on the 15 year would be $1454.44.

Your payment on the 30 year would only be $998.57.

My advice? Finance with a 30 year, and treat it like a 15 year. In other words, figure out what your payment would be with a 15 year loan on the amount your borrowing, and make THAT payment, or as close to it as you can get, on the 30 year loan.

Sounds crazy? Not if you're applying that extra to the principle amount of the loan. The faster you reduce your principle owed, the less interest they can charge you, so the faster you pay off the loan, and the less interest you pay.

For example, from WSJ again, if you had a $200,000 loan, at 4.5% for 30 years, and you paid an extra $100 each month towards the principle, you'd save $31,700 in interest, and pay the loan off 5 years early!!

Imagine if you payed them an extra $200-250 a month!

So, if you're thinking about purchasing, or refinancing, strongly consider what a 15 year mortgage can do for you!

Here's the WSJ article for referrence: Paying off the house in 15 years.

If you have any questions, give me a call!

Erin Goldbach

Designated Broker

Vanguard Platinum Realty

602 524 0186

Simple, Inexpensive Ways to Improve Salability

To follow up on my article yesterday about the cost benefit of going solar, I ran across an article from the Kiplinger Report that has some good, affordable, suggestions for home owners.

They have 8 suggestions, and I'll recap them with my comments.

1) Kitchen Faucets & Sink. Cost: Up to $600.

This is a good idea, but on the pricey side for this market. Kiplinger makes the point that the "Kitchen is King", and I agree with that in many respects. Very often the kitchen, especially with the popularity of the "Great Room" set up, is heart of the home. Upgrades here may be a good choice.

2) Backsplashes. Cost: $100.

Keeping with the kitchen theme, a nice new backsplash can improve the kitchen's appeal. Kiplinger recommends using tile for the backsplash. I'd be very careful with that. Depending on the color scheme of your kitchen, and what type of countertops you have, tile could look very out of place! For folks with a basic kitchen, meaning: plain flooring, formica counters, tile is not going to look good. My suggestion? Get a piece of Corian, or something similiar, and attach it above your stove.

3) Vanity Cabinets and Toilets. Cost: $400-500 per bathroom.

New bathroom cabinets and toilets? Again, not so cheap, but initially, I liked the idea. However, on second thought, I'm not such a fan of this idea. Why? In my experience, bathrooms, understandably, become a very personal space. Because of that, buyers look at bathroom with a much more critical eye. So the risk is that the new cabinets and toilet you spend your money on, a prospective buyer may not like. And if they know you just installed them, then they'll be less inclined to redo things to their liking.

4) Paint. Cost: $200-600.

PAINT!!! It's a good thing!! A new coat of paint is normally the second thing I suggest in terms of "prettying" up a home. (I'll tell you what the first thing is in a bit.) Buyers LOVE new paint! They love the smell! They love the way the walls look fresh and new! And if you go with a nice lighter, or neutral, color, the home will feel bigger than it is. But again, go with the safe colors. No accent walls, faux finishes, or texturing.

"Eggshell", "Ecru", and "Tope" are going to be your friends. Light pastels in bathrooms usually go over well, too.

5) Crown Molding. Cost: $5/foot.

Again, kinda like this one at first, but on second thought, not so much. Yes, Crown Molding can give a room that "wow!" factor, and can look very nice. However, in some cases, it can make a room feel smaller than it is. Especially in a home with 8ft ceilings. The Crown Molding draws the eye to the ceiling line, and with 8ft ceilings, this isn't a good thing. Also, the color of the molding makes a huge difference. Darker colors will increase the claustrophobic feeling, and although lighter colors won't, they don't draw the eye much either.

6) Storage/Organization. Cost: $20-$500.

What Kiplinger refers to here is buying shelving, or closet organizers to organize your stuff. I agree that a cluttered, disorganized, home does NOT show well. A better idea, and a less expensive one is this: Get rid of the JUNK!! Seriously, if your home is floor to ceiling with stuff, it doesn't matter how organized it is, no buyer is going to be interested buying your rat's nest.

7) New Front Door. Cost: $150-$500

Yes, the front door is the first thing a prospective buyer sees. And Kiplinger claims a Return On Investment of 129% for a steel door. I'm a little skeptical of that claim. But, more importantly, many buyers are now realizing that they will probably never look at that front door again once they move in. Ask yourself, who actually goes in their own front door anymore? Hardly anyone who's got an electric garage door opener and parks their car in the garage. Even if you don't actually park in the garage, most people will still use their garage door opener and enter through the garage. My suggestion? If your front door is looking a little weathered, slap a coat of paint on it.

8) Landscaping. Cost: $200-$500.

Kipling suggests landscaping the front yard with new plants, etc. Don't. Not in this market. Yes, its going to look nice for the prospective buyer. But with the work schedules most people have these days, the last thing people want to do is come home and mow the grass. Also, the expense of maintaining a lush green lawn can be prohibitive. And to be brutally honest, with so many foreclosed/short sale homes on the market, people are used to seeing brown lawns. Definitely clean it up, rake up any leaves, pull any dead plants, but concentrate your efforts on the interior of the home. Buyers know that lawns and yards are easy to redo to their own preferences when time/funds permit.

So, What is the FIRST thing I tell a seller to do to increase their homes appeal?

CLEAN IT!! Dust! Vacuum! Get the carpets cleaned! Clean the bathrooms! Clean the kitchen! Get rid of the clutter!

In my experience, buyers can overlook many faults in a home, but if they feel the home is "dirty", they bolt for the door! If buyers come to view your home, and they wrinkle their nose when they walk in, look at the kitchen sink, or toilet, they just lost all interest in your home.

Do you have an older stove? One with actual cooking coils? Replace the burner liners!! Shiny new chrome will look infinitely better than crispy, burned on crud. It's a simple $30 upgrade that really can have a huge return.

One comment on the carpet. Get it professionally cleaned. A good, experienced, carpet cleaner can make 10 year old carpet look like new. They can get rid of stains, and even restretch or do small repairs to the carpet that will vastly improve its appearance. But that carpet needs to look clean! For people in the west Valley, I'd highly recommend Lacks Cleaning. I've know the owners for several years, they do an amazing job, and will treat you fairly and honestly! They can be reached through their website www.lackscleaning.com, or by phone at 623-776-1534.

Here's the Kiplinger article for you to consider.

8 DIY Projects to Add Value To Your Home

If you're thinking about selling, and would like a "professional" opinion on what you can do to help your home sell, give me a call, and I'd be happy to come take a look!

Erin Goldbach

Designated Broker

Vanguard Platinum REalty

602-524-0186

AZ Humane Society holds demonstration and waives fees

AZ Humane Society holds demonstration and waives fees

To date this year, the Arizona Humane Society has taken in over 31,000 animals.

31,000 animals surrendered or found, in less than 9 months.

19,000 of them being cats or kittens.

To say the Humane Society is overwhelmed would be a gross understatement.

But you can help this weekend!!

On August 28-29th, AZHS is WAIVING all adoption fees!!

If you've been thinking about adding a "fur-kid" to your family, this weekend is a great opportunity!

And if you can't adopt, at least make a donation. Food, Blankets, Dog/Cat Toys, or Cash.

These people do good work, help them out if you can


Erin Goldbach
Vanguard Platinum Realty
Designated Broker
602-524-0186

Solar Panels and Sales Prices

Asking "What can I do to increase the sales value of my home?", may seem like an odd question in this real estate market, where many owners are facing negative equity.

However, with the increased push for Alternative Energy, and the incredible tax breaks and incentives offered to defray the initial costs, Solar Panels and Solar Energy for Residential homes has become an interesting prospect to many home owners.

The question then becomes: Are they worth it?

That is a very difficult question with many variables, and the answer comes down to a resounding "maybe".

For some people, with lower energy needs, and who plan on occupying their home for a long period of time, 10-15 years, then, Yes, they may be.

For people with higher energy needs, and no plans to stay in their home for the long term, a smarter choice would be to use their money for upgrades that would improve the energy efficiency of their home. These would include additional insulation, a new, more efficient HVAC system, and new water heaters.

In the Phoenix market, the average 5,000 watt solar panel system, which would power a normal home, costs roughly $35,000. With the tax breaks and incentives, the out of pocket cost to the consumer is usually about $13,500.

*Assuming* the average household has a monthly electric bill of $100, it's going to take a little over 11 years to hit the break even point on that expense.

11 years is a long time. But, there is the possiblity that you could sell any excess power back to the electric co, which would help offset the cost. And there's also the possiblity that energy prices will increase, which would also cause the system to pay for itself more quickly.

In the minus column, though, is the cost of the system's maintanence. And that varies depending on the system you have installed, and who sells it to you.

The other popular option is to lease the system. This carries some risks that I'm not comfortable with.

First of all, the leases are long term, 20 years in most cases. What happens in the meantime?

Who's responsible for maintanence?

What if the system is damaged in a storm? Who's insurance would cover it? Would you even be able to get it covered by your home-owner's policy? Who pays if the system has to be moved to do roof repairs?

What happens at the end of the lease? If you sell your home, is the lease transferrable to the new owners? Do you own it at the end of the lease, or will they remove it?

As tempting as Solar Energy is, especially here in Phoenix, there needs to be some serious consideration that goes into your decision whether or not to invest in a residential system.

There's a good article available at the Wall Street Journal, with some more good info


http://http//online.wsj.com/article/SB10001424052748704407804575425512927624110.html?mod=WSJ_RealEstate_LeftTopNews


If you have any questions about other things that may increase, or decrease, the value of your home, or how to best stage it, feel free to give me a call!

Erin Goldbach
Designated Broker
Vanguard Platinum Realty
602 524 0186

Property Management Packages!

Vanguard Platinum is now offering Property Management Services!!!

For those of you unfamiliar with the story, I worked in property management for a number of years, and fell in love with that aspect of the real estate business. I started Vanguard Platinum with the specific intention of starting my own property management business, and now that's exactly what we're doing!

I'm happy to announce our new PM Packages. Each is designed to meet the needs of owners requiring different levels of assistance.

Our Premium Package!! *For Out of State owners, or those who want to be "Hands-off"*

1) collection of rents, payments of city sales tax, H0A fees, and mortgage. Issuance of the monthly accounting report with net monthly rent payment. Serve as tenant’s primary contact for rent related issues.

2) Provide tenants 24-hour maintenance assistance. Landlord may pre-authorize repairs up to a specific dollar value and create prudent reserve fund to cover such costs. Property manager would collect repair estimates from licensed contractors for repairs above pre authorized amount, and present to owner.

3) Locate qualified tenant. Applicants are subject to a thorough credit, and criminal, background check. Current employment and income are verified, as well as previous rental history. Commission paid to Tenant’s agent of $250, or 3% of gross lease (owner’s choice) for locating qualified tenant.

4) Act as landlords third party designee to set up relevant city or county sales/rental tax accounts. As well as designated representative for out-of-state owners.

5) Initiate and conduct eviction proceedings on owner's behalf, in the event of tenant’s default.

6) Conduct monthly drive-by inspections to evaluate exterior and yard maintenance(with photo documentation). Conduct quarterly, randomly timed, walk through inspections to assess interior upkeep and conditions.


Standard package *for landlords with vacant properties and/or new to property management*

1) collection of rents, payments of city sales tax, H0A fees, and mortgage. Issuance of the monthly accounting report with net monthly rent payment. Serve as tenant’s primary contact for rent related issues.

2) Provide tenants 24-hour maintenance assistance. Landlord may pre-authorize repairs up to a specific dollar value and create prudent reserve fund to cover such costs. Property manager would collect repair estimates from licensed contractors for repairs above pre authorized amount, and present to owner.

3) Locate qualified tenant. Applicants are subject to a thorough credit, and criminal, background check. Current employment and income are verified, as well as previous rental history. Commission paid to Tenant’s agent of $250, or 3% of gross lease (owner’s choice) for locating qualified tenant.

4) Act as landlords third party designee to set up relevant city or county sales/rental tax accounts. As well as designated representative for out-of-state owners.

5) Initiate and conduct eviction proceedings on owner's behalf, in the event of tenant’s default.

Basic package *for landlords with existing tenants who want to handoff bookkeeping tasks*

1) collection of rents, payments of city sales tax, H0A fees, and mortgage. Issuance of the monthly accounting report with net monthly rent payment. Serve as tenant’s primary contact for rent related issues.

We will also reduce, or waive, our set up fee for owners with multiple properties.


For Questions, or to set up an appointment,call:

Erin Goldbach
Designated Broker
Vanguard Platinum Realty
602 524 0186
Erin@Eringoldbach.com

Social Media Revolution

Something interesting that a friend of mine posted on her blog.

"The Argument for Business Analytics in Social Media"

Phoenix 1st Time Home Buyers Assistance!

Just a quick update, I'll have more info later.

But here's the jist of it:

The City of Phoenix is offering a $15,000 incentive to 1st time home buyers!!

BUT!! (there's always a "but") This incentive is only available for certain Fannie Mae foreclosure homes. These homes are completely move in ready!

That's right! Completely refurbished! Including appliances!! Yeah! Move-in-ready!!

AND! These properties will NOT be listed on the MLS!! So, in order to find out about them, you need to talk to a realtor who's got the info from COP! (that would be ME!)

Requirements are basic FHA requirements as far as credit score and DTI (if you don't know what that is, call me).

But you only need 1% down, NOT 3.5%!! That's what the $15,000 is for! to cover down payment, and closing costs, and then whatever else you want!

The $15,000 becomes a "silent Second", with no interest, no payments for the entire time you own the home!! You do have to repay the loan when you sell the home, but when else is someone going to offer you $15,000 just to buy a home??

If you'd like more info, give me a call!

Erin Goldbach
Designated Broker
Vanguard Platinum Realty
602 524 0286

CNNMONEY.Com Article Written by Morons.

CNN, Which is apparently as clueless about Real Estate as it is about just about everything else, posted this load of crap about mistakes home buyers make. Unfortunately, the author, or authors, of this drivel are ignorant of how real estate transaction are actually conducted.

CNNMONEY.COM "6 Biggest Mistakes Homebuyers Make"

And, here's the REALITY of Realty.

1. "Know your credit score" Yes, your credit score is a major factor in whether you can qualify for a mortgage, what kind of mortgage, and the interest rate. HOWEVER, it is far from the ONLY factor. INCOME!! How much money you make is a huge factor! As is your "DTI" Debt To Income. If you make $50k/year, have perfect credit, but also $100K in Debt (especially credit cards), you won't get a loan even if you have an 800 FICO!

2 "Buying a car before the house" Yes, a bad move because it MAY lower your credit, BUT!! even worse move because it will raise your DTI!!

3 "Skimping on Home inspection" Can't argue with this one. Home Inspections are a MUST!! However, If you can't afford to have a home inspection done, YOU SHOULDN'T BE BUYING A HOUSE! Seriously, a H.I. cost $250-450, and if you're that strapped that you can't pay for it, then you won't be able to afford any repairs. Wait to buy till you have more funds!

4 "No Lawyer" Apparently, whoever wrote this crap either is, or has a relative who's a lawyer. The author also doesn't understand that as a Licensed Realtor, it is your duty to protect and promote your clients best interest. In other words, it's YOUR Realtor's job to make sure you don't get screwed. And that comes first and foremost in any reputable Realtor's mind. If you think your Realtor would let you take a hit just to close a deal, GET A NEW REALTOR!!

5 "No Contingencies" First of all, there are NO minimum requirements for Earnest Money Deposits!! NONE! Technically, you don't even have to OFFER an Earnest Money Deposit!

If you do, there are specific, and very broad, contingency clauses that allow the buyer to get their EMD back. Failure to appraise for sales price, failure to passinspection, failure of the buyer to secure financing are all standard language contingencies in the AAR sales contract.

I would NEVER allow a client of mine to sign a contract waiving these contingencies, and neither would any other responsible agent!

6 "not budgeting for Insurance" Further proof that the author of this article is completely ignorant!

You CAN NOT get financing, conventional or otherwise, unless you know, before purchasing, what your insurance costs will be!!

Why? #1 If your insurance costs are too high, you either won't be able to afford your total mortgage payment, and you'll default,

#2 or you'll drop the insurance, which will breach your contract with the lender who financed you, because THEY have a stake in the house too!

If you want to sit down with a Real Estate Broker who actually knows what they're talking about, and get some good advice about buying a home, and what you'll need to do, please, call me!

Erin Goldbach

Designated Broker

Vanguard Platinum Realty

602 524 0186

What's so special about April 30th 2010???

Why should that date mean anything to you?

April 30th...............

No, not your Mother's birthday. Not your anniversary. Tax day was two weeks before........

April 30th is when the New Home Buyer's $8000 tax credit ends!!!

That's a big deal!!

For 10 more weeks, if you buy a home, and you haven't owned a home in the last three years, you qualify for an $8000 tax credit! That's right! The Federal Government will send you a check for $8000!

What's the catch? There is none! You have to have the property under contract by April 30th, and close by June 30. That's it!

And there's also the Existing Home Buyer Credit of $6500! If you've lived in your home 5 of the last 8 years, and are up/down sizing because of a life event (you have a child, or one goes to college), you can get a $6500 tax credit when you purchase your new home!

Do you know someone who's renting? Do you know someone who's outgrown their current home?

Have them give me a call to see how I can help them get FREE MONEY!

Erin Goldbach

Vanguard Platinum Realty

602 524 0186