Archives for February 2007

My Job ISN’T Doing This to Me!

What will your career do to you?  While watching the a.m. news, drinking my morning coffee…I came across this from Career Builders.   Totally non-scientific.   Click this to see my Valentine’s message to my husband.


  Providing mortgage strategies IS NOT doing this to me…but blogging might be!  Happy Friday everyone.    

Can I Pay My Own Taxes & Insurance?

Mpj034188500001Unless you have 20% or more of equity in your home, chances are you have an escrow account (also referred to impounds or reserves) for your home owners insurance and property taxes.   Lenders want to make sure that they reduce risk by requiring taxes and insurance to be included in your monthly mortgage payment.  Property taxes are one of the few items that can take precedence over lien position in the event they were to not be paid.   Your first mortgage wants to stay just that, a first mortgage (in the event of a worse case scenario, foreclosure).

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It Pays to Plan for College

Mpj038725100001My son will be entering high school next year.  I really can’t believe it.  If all goes as it should, he’ll be in college in four years!  I did start a 529 account for him a few years ago…much later than I should have, but I’m thankful that we have it.   

Yesterday,  Ben Bernanke said…a "key observation is that over the past few decades, the real wage of workers with more years of formal education have increased more quickly than those of workers with fewer years of formal education.  For example, in 1979 – median earnings for workers with a Bachelor’s or higher degree were 38% more than those of high-school graduates with no college experience; last year, the difference was 75%." 

Do you have children that you’re planning to help finance their college tuition?  I would love it if my son receives a full scholarship…however, I certainly can’t depend on that. has an useful college tuition calculator for crunching tuition dollars.

For example, assuming your child attends a public in-state college with a tuition, room & board of approx. $12000 per year (factoring in tuition inflation).  Both scenarios are using a return of 6% on the investments.

Scenario A:   Future college bound student is currently 3 years old.  Total est. tuition cost to be saved:  $101,500.   Here are some options:

  • Start investing $384 per month for 15 years, or
  • Do a lump sum today in the amount of $44,850, or
  • Lump sum today in the amount of $15,700 plus $250 per month for 15 years.

Scenario B:  Future High School freshman, currently 14 years old (gulp).  Total estimated tuition cost to be saved to go to the same college as Scenario A:  $62,850 (less time for inflation).   Here are the same options:

  • Start investing $1,200 per month for 4 years, or
  • Do a lump sum today in the amount of $50,000, or
  • Do a lump sum today in the amount of $39,400 and $250 per month for four years.

If $250 seems like a bit too much to part with, you may want to consider meeting with your Mortgage Planner and/or Financial Planner in order to review your current debt structure.   A 529 is just one option.  I like it for my scenario because the money I put in grows tax free.   And…I tell my son that if he doesn’t go to  college, I will select one of my nieces or nephews to be a benefactor!  Funny how that motivates him.  And, I don’t HAVE to do this…but I want to.  In my profession, I see many first time home buyers buried in student loans…some of the amounts can be staggering.

The bottom line is, the earlier you begin saving and planning for your child’s education, the more funds you will have for furthering their education and it will actually cost less to fund the education.  And…it’s never too late!

Demographics by Neighboroo

While having my morning coffee, I surfed various sites BloodhoundBlog compiled that I posted yesterday.   There’s lots of great stuff–one site I found especially interesting is Neighboroo.   

Often times, I am asked about how to find demographics for a certain region…here you go!   This site provides information by zip code.   To check it out, click here.


Top Real Estate Blogs Compliments of BloodhoundBlog

Bloodhound Blog recently compiled a list of some of the top real estate related blogs in the industry.  The Mortgage Porter is still pretty new (3 months old)…we’ll have to see what we can do to be added to such fine company!  There is a lot of great information here.  I suggest if you find blogs that interest you, subscribe to their email list or feeds.    Happy blogging!

Update on Loan Originator Licensing

Mpj039935000001DFI has announced that Loan Originators who submit the required forms for licensing can continue to do business as usual.  This is a change in the original plan of not allowing LOs to take loan applications if they did not submit their MU4 form, fingerprints and application to DFI prior to December 31, 2006.    DFI states "Because DFI continues to receive a large volume of applications and because that volume has an impact on DFI’s ability to quickly process the applications, DFI will now allow loan originators to continue originating loans after DFI has received a complete license application. "

Hmmm….so the LOs who could not follow instructions and submit their information by the deadline get a green light to go ahead anyhow?   I cannot imagine how many applications they still needs to wade through and how long the tardy LOs would be out of business (previous decision was that they could not complete a loan application until they received their license from DFI and that DFI would process applications in a first come, first serve basis).    

I hope this is not a trend with DFI.  Colorado’s similar new law has all ready banned 10 Loan Originators.   If Washington state has banned any LOs from this new law, I’m not aware of it.   Since I’ve covered this topic in previous post, I thought I should provide you with the current update.

What is Escrow?

Mpj042214800001_1One of the first-time home buyers I’m currently working with just called me with a few excellent questions.  She and her boyfriend have recently made an offer on their next home, with their agent which was accepted.  They now have handsome stack of papers from the escrow company (as if the paperwork from the lender wasn’t enough) that caused some questions.

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My Second Home

I often tell the story, when I’m meeting with first time homebuyers who are a bit discouraged with today’s home prices, about my first home.   We were renting a nice apartment in Kent when a builder had left a flyer on our car promoting that if we could afford $X in rent, then we could afford $X of a brand new house!  WOW!  I couldn’t believe it…but my wheels were turning.   

I began picking up the Homes & Land magazines and before you know it, we had landed with a real estate agent and were looking at homes…with that bright and shiny brand new home in our minds.   In reality, we qualified for a 900 square foot older rambler with 3 bedrooms and 1 bathroom…and we pounced on it for about $65,000.   In 1989, our interest rate was in the 11% range.  My commute out of NE Tacoma to downtown Seattle was horrendous!  Even back then.   

We lived there about one year and we were experiencing a market similiar to what we have lately in our area.   I began to panick that we would be "trapped" in that house forever.   Although I was grateful to own a home, it was not where I wanted to raise our future family.   My (then) husband and I discussed matters and agreed to wait 5 years to move.   The next day, when he was at work, I bought a house…subject to his approval, of course!   He wasn’t very happy when I called him at work to tell him what I had done.   He forgave me when he learned that our house we had purchased a year ago was worth $90,000!   

We bought our second home.  This one was new construction in southwest Madronameadows Federal Way.  The plat was marketed as "The Affordable Street of Dreams".   This photo is not of our second home, but is in the neighborhood (Madrona Meadows…there were  no Madrona trees in the plat…btw) and is similiar in size and age.

I thought I would provide you with the sales history on our former home in Madrona Meadows (these figures are not for the home in the photo):

  • We purchased July 1990 for $124,495
  • We sold in April 1993 for $134,900 (approx. 7.5% appreciation over 3 years)
  • Sold again in July 2003 for $215,000 (approx. 9% appreciation in 10 years)
  • Last sold in March 2006 for $303,000 (approx 14% appreciation in 3 years)

Owning a home can be the best savings plan a person can have.  In 16 years, the property more than doubled in value (241%), provided income tax benefits, not to mention shelter!  Back in 1990 when we purchased in Madrona Meadows, there was "bubble talk" as well and in our area, we have yet to see real estate take a nose dive.  It may simmer or slow down a bit, I certainly would not recommend that potential buyers sit on sidelines waiting for that event.  Our local economy is too strong for that to happen anytime soon.   In addition, "first time" homes are great purchases because there will always be a market for them.