Choosing an home warranty company can be time-consuming and confusing, so I have compiled a list of companies offering service in Arizona. Please feel free to email any company links I have overlooked, or feedback on any links in my site.
American Realty Brokers neither endorses, nor recommends, any particular home warranty company: the choice is yours!
American Realty Brokers does not endorse any particular home inspection company.
Should You Leverage Your Home or
Pay It Down Rapidly?
By David Witt, CEO / Mortgage Planner
Concept Lending Group
Phoenix-AZ – There is a great debate within the inner-mortgage circles these days. Should we, as loan professionals, encourage clients to borrow as much money as possible? Or would consumers benefit more if we helped them to understand the advantages of 15-year amortization schedules and pre-paying principal? Let's examine the pros and cons of both strategies.
Leveraging Your Property. In order to understand why you'd want to borrow as much as possible for your home purchase, you must first grasp the concept that equity has a zero rate of return. Here's an example:
If Consumer "A" buys a home for $300,000, and puts 20% down, then they have $60,000 in equity. Over the next 5 years, the property appreciates $100,000 in value. Consumer "A" now has $160,000 in equity.
Consumer "B" buys a home for $300,000, and puts no money down. At the end of 5 years, that same home is now worth $400,000. Consumer "B" has $100,000 in equity, which is the same appreciation as Consumer "A", a net $100,000.
As you can see, your down payment has nothing to do with your rate of return. What becomes important is how you choose to manage the $60,000 you didn't use as a down payment. If you use it for frivolous activities, such as buying toys or going to
However, if you were to invest the $60,000 in a vehicle that can out-earn the cost of that debt, then this could be a formula for success. This is why some lending professionals suggest putting as little down as you possibly can, maximizing your tax write-off, and investing the rest. This principle has been applied for many years in the life insurance game. The old saying goes, "Buy term and invest the rest." The key component is taking the money you would have used as a down payment and creating an asset accumulation account. This account should earn a significant enough rate of return to enable you to pay your mortgage off entirely and achieve the ultimate goal of being debt-free.
Paying Your Home Down Rapidly. There are very few times over the course of my career that I have seen a client with zero debt and no financial difficulties. Choosing to pay off all of your debt can reduce stress and help you to gain freedom of cash flow for investment opportunities. A 15-year mortgage or a bi-weekly payment strategy provides structure. It can also put you on track to have your mortgage paid off within a set timeframe. Simply put, it contains built-in discipline.
It's important, however, to understand that regardless of how rapidly you pay your home off, you're not getting any greater rate of return on your investment than if you paid it off slowly.
Conclusion. So how does one determine which scenario is best? The choice depends entirely upon the individual. Savvy consumers who are disciplined, and are comfortable taking chances from an investment perspective, would do well with the first scenario. Over the course of time, it's been proven that your rate of return over the long-haul will be far greater than the rate you'd pay for a mortgage in today's rate environment. It's important to seek the advice of a skilled investment advisor to ensure success with this strategy.
The second scenario is best for those who have a difficult time managing their money or who'll sleep easier at night knowing they have a plan in place to pay their loan off more rapidly. Be sure that your budget can handle accelerated payments. When consumers "bite off more than they can chew" with a 15-year mortgage, they frequently end up having to refinance back into a 30-year schedule.
If you find this subject intriguing and would like to know more, I recommend that you read a book titled, Missed Fortune 101, by Douglas Andrew. It's an outstanding read that is very simplistic and goes into far greater detail than I can cover in this column. Douglas is a financial planner who advises safe-structured investments such as whole life policies and tax-free fixed income instruments.
. If you would like to obtain a FREE CD Interview with financial planning expert and best-selling author, Douglas Andrew, please David J Witt at 800-628-8868 #15
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David J Witt
Concept Lending Corp.
800-628-8868 #15
To contact David Witt
Whether you're looking to buy your first home, or trading up to a larger one, there are many costs - on top of the purchase price - that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing day if you're not informed and prepared. Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every situation, however it's better to know about them ahead of time so you can bud-get properly. Remember, buying a home is a maj or milestone. Whether it's your first, second or tenth home, there are many important details to address, during the process. The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home. Read through the following checklist to make sure you're budgeting properly for your next move. 1. Appraisal Fee Your lending institution may request an appraisal of the property, which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$ 300. 2. Property Taxes Depending on your down payment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid. 3. Survey Fee When the home you purchase is a resale (vs. a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $190 - $1,000. 4. Property Insurance Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan. Beware! Some homes may not be insurable. Make sure you have an insurability clause in your purchase contract. 5. Service Charges Any new utility that services your hook up, such as telephone or cable, may require an installation fee. 6. Escrow and Document Preparation Fees Escrow fees are split between the buyer and the seller in Colorado. However, additional fees will be charged for the buyer's mortgage closing. This can include first and second mortgages. In addition to the "Doc Prep" fees charged by the lender, some lenders will e mail the loan documents and therefore the escrow or title company may charge a electric to paper fee. 7. Mortgage Loan Insurance Fee Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% -3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment. 8. Mortgage Brokers Fee A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost. 9. Moving Costs The cost for a professional mover can cost you in the range of: $50-$100/hour for a van and 3 movers, and 10. Maintenance or HOA Fees Condos charge monthly fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building. 11. Water Quality and Quality Certification If the home you purchased is serviced by a well, you should consider having your water checked by your local experts. Depending upon where you live, determines whether or not a fee is charged, to certify the quantity and quality of the water. 12. Local Improvements If the town, city or county you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a propertys taxes by hundreds of dollars. 13. Metropolitan or Special Tax Districts This is a unique tax district set up by the developer to finance all aspects of the physical infrastructure such as streets, sewer and even recreation centers or golf courses. The developer only has to put up a small percentage of monies for these costs and the rest are floated with bonds and added to the homeowners tax bills until paid off. The arrangement can work nicely when there are plenty of homebuyers to pick up the tax bill. But, in a down market, watch out...you could end up holding the bag when there are not enough buyers to fund the bonds. |
DESERT SAFETY
There are numerous opportunities for recreation in the deserts of
Always be sure that someone knows where you are going and when you expect to return.
Never travel alone on foot or by vehicle. Flash floods do occur. Avoid camping in washes when there is a threat of rain. Do not attempt to cross them if they have water in them. It is probably deeper and faster than you think.
DEHYDRATION: The only way to avoid dehydration is to drink water. Don't rely on your thirst to determine when to drink. Make a habit of drinking water at frequent intervals. Don't ration your water.
One gallon of water or more per person per day is the minimum amount of water you should carry. In hot weather, two gallons or more is strongly recommended. The amount of water someone needs varies from person to person. Remember, it is better to carry too much water, than to run out.
Make sure to wear clothing that is light in color and loose fitting. A wide brimmed hat, long sleeved shirt, and long pants will hold perspiration rather than exposing it to the dry desert air. Conserve sweat, not water.
LOST/STRANDED: If you become stranded or lost in a vehicle, stay there. It is easier to find a vehicle than a person in the desert. Find or make shade. Ground temperatures can be up to 30 degrees hotter than the air 12" above. Signals will increase your chances of being found. Any type of flare, signal mirror or smoke signal will help make your location known. The universal distress signal is anything occurring in threes. An example would be three blasts of a whistle or a horn.
If you are on foot and must travel, do so when it is cool. Otherwise, seek shelter from the sun. Mark your path with stones, notes, etc. If you leave notes, include the date, time, and your direction of travel.
MINES: Abandoned mines exist throughout the deserts of
ANIMALS: All animals, whether poisonous or not, should be respected. Respect their boundaries by enjoying them from a distance. If you are sleeping outdoors, use a cot. This will keep desert creatures from trying to move in with you at night.
BEES: Unfortunately, Africanized "killer" bees have established themselves in desert areas of
Here are a few essentials to bring with you when visiting the desert on foot:
__appropriate clothing
__food and water (bring extra)
__whistle and signal mirror
__sunglasses and sunscreen
__pocket knife or multiplier tool
__waterproof matches
__first aid kit (and the knowledge to use it)
__flashlight
__map
__compass
Along with the items listed above, if you are traveling by vehicle or off-highway vehicle (OHV), remember the following:
__tool kit (wrenches, screw drivers, etc.)
__extra parts (spark plugs, belts, hoses, chain master link, etc.)
__extra fluids for vehicle (oil, coolant, gas, etc.)
__high lift jack
__sand boards/mats
__tow rope/strap/chain
__shovel
__spare tire or tire sealant/repair kit and air pump
__signal devices (mirror, flares, etc.)
__duct and electrical tape
__baling wire
__radiator stop leak
__fifty feet of parachute cord
__$6.00 - a $5.00 bill and change for a pay phone
Healthy Energy Drink