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Timing the market: Refi or keep ARM loan?

By Benny Kass, Monday, October 13, 2008.

DEAR BENNY: I have a hybrid mortgage that is fixed for the first five years at 4.25 percent, and is tied to U.S. Treasury securities. The loan document notes that the index value is 2.1 and the margin is 2.75. The first "change date" on the loan is Nov. 1, 2009. My loan documents say on the first change date, my interest rate could be as high as 9.25 percent or as low as 2.75 percent, with no more than a 2 percent increase in any given year thereafter. Given the current fixed interest rates, is it advisable for me to refinance the loan now or continue to take advantage of the low rate I am paying for another year? What is the likelihood that the "index" could reach 6.5 percent in a year, raising my interest rate to 9.25 percent at the end of 2009? I would appreciate your response. --Belmont more...

Walkaway paves path to prison

By Benny Kass, Monday, October 6, 2008.

DEAR BENNY: I know someone who has qualified to obtain a second house by stating that he will rent his first house; however, he has no intentions of actually renting it. Upon obtaining the new house, he plans to walk away from the first house, letting it go into foreclosure. He will already own his new house before his credit is hurt by the foreclosure, and he plans to live in the new house until the foreclosure is removed from his credit report in seven years, so he sees it as the perfect plan. more...

When is it safe to destroy mortgage papers?
By Benny Kass, Monday, September 29, 2008.

DEAR BENNY: We have owned our home since 1998 and have refinanced twice since that time. I still have the original mortgage papers along with the twice-refinanced papers. I am afraid to throw anything out but they are quite bulky and take up a lot of room. Do I really need to keep all three or can I toss the original papers when we bought the home and the second refinance papers and just keep the most recent refinance mortgage papers? --Ann more...

Buyers learn of flood problem too late
By Benny Kass, Monday, September 22, 2008.

DEAR BENNY: We bought a house (built in 1965) on Dec. 18, 2006. Six days later, heavy rains flooded a storage-room area on the lower level. We called the real estate agent who claimed that the prior owners had no knowledge of any water problems and suggested we call a handyman, who came over and did some work. The room has continued to flood whenever there is a heavy rain. Now that we are very aware of the problem, there is evidence that the prior owners also knew, but did not disclose it. more...

Condo owners disagree on dry rot repair
By Benny Kass, Monday, September 15, 2008.

DEAR BENNY: I own a condo in a two-unit building. We have always split all common expenses 50/50 per our legal documents. Recently we discovered a leak in the common garage, and have established the cause and are embarking on repairs. This leak also caused dry rot in some of the hardwood floors in my unit. I considered this to be a common expense and expected the entire cost of the repairs to be divided 50/50. The other owner disagrees and claims that because the damage is in the interior of my unit I must bear the cost of those repairs myself. Your advice will be most helpful. more...

Builder offering big discounts to select buyers
By Benny Kass, Monday, September 8, 2008.

DEAR BENNY: We recently purchased a new home, only to find out that two weeks later the builder had offered substantially more of a discount to other buyers for the same model we had purchased. This has continued to date, but we were told there were no more discounts, all the while the builder was offering discounts above and beyond what we received. Is there any recourse I can pursue in this matter as I am left with hardly any equity in a manner of less than two weeks after I closed? --Raj more...

Three ways to reduce capital gains tax
By Benny Kass, Tuesday, September 2, 2008.

DEAR BENNY: I was told by a prominent accountant that there is a loophole in the law that states that you can be exempt from paying capital gains (if you are in a home less than the two-year period) if there are "unforeseen circumstances" involved. Are you aware of this? Can you doublecheck to make sure? This accountant is well trusted by a lot of businesspeople! At the time I was going through an "unforeseen" divorce. --Patricia more...

Not married? Buy home as tenants in common
By Benny Kass, Monday, August 25, 2008.

DEAR BENNY: My daughter and her boyfriend are thinking about buying a house and she is putting more of a down payment than he. Is this a good idea? --Doug

DEAR DOUG: I don't see any real problem with this arrangement, so long as your daughter and her friend enter into a written agreement spelling out their rights and responsibilities. more...

With buyer lined up, who needs an agent?
By Benny Kass, Monday, August 18, 2008.

DEAR BENNY: I plan to sell my house and have already found a buyer and believe we can come to agreeable terms. Do I need a real estate agent or should I just retain an attorney? --Katherine

DEAR KATHERINE: I know that the real estate industry will send me letters objecting to my response, but because you have already found a buyer, I see no reason to spend 6 percent, 4 percent or even 3 percent of the sales price on a real estate commission. Any real estate attorney can assist you with the negotiations with your potential buyer, and can easily -- and clearly at a much lower cost -- prepare the purchase and sales contract. The attorney can also give you guidance throughout the entire process. more...

Homeowners feel title office should pay for mistake
By Benny Kass, Monday, August 11, 2008.

DEAR BENNY: We just bought a house in a community association and the title company handled all the fees and the settlement charges. We have been in the house for three months and we just got a $200 bill for an initiation fee for our association. The property manager told me that the title company should have called and asked about fees. Although we paid three months of fees in the settlement charges for the association, the title company never inquired about an initiation fee. more...

Is down-payment gift taxable income?
By Benny Kass, Monday, August 4, 2008.

DEAR BENNY: In January I lent my daughter $20,000 so she could use it as a down payment on her condominium unit. She gave me a promissory note. I took the money out of my retirement account (I am retired). My tax person said this will be added to my yearly income and I have to claim it as my income. I have a friend who works as a loan officer at a bank; she said I just have to claim the interest. Who is right? --Linda more...

Pitfalls of buying foreclosures
By Benny Kass, Monday, July 28, 2008.

DEAR BENNY: My mother was under contract to buy a foreclosed house from the bank. Before closing, she had the house inspected. During the time the house was being inspected, the heat and water system was shut off (I guess the former owners weren't paying their water and gas bill). The inspector documented in his report that the heater and water were not inspected and further stated that when it is turned on we should consult a contractor to check that everything is in order. My mother signed off and purchased the house. more...

Facing foreclosure: When must I move out?
By Benny Kass, Monday, July 21, 2008.

DEAR BENNY: I am one of the unfortunate who has to deal with eventual foreclosure. Can you tell me how long I can remain in my home until legally having to vacate? --Constance more...

Sellers say Realtor invaded their privacy
By Benny Kass, Monday, July 14, 2008.

DEAR BENNY: We contracted with a well-known Realtor to sell our home. After the fully executed sales contract was signed, we asked the agent to remove the lawn sign, which we found embarrassing and distasteful. She refused. Additionally, she sent a mass mailing with our home address, which contained interior pictures, describing her great success in selling the home. This mass mailing was sent despite our still living in the home. What can be done to prevent these Realtors who behave as if the property belongs to them? --M.
DEAR M.: When you decided to use this agent to assist you in the sale of your house, you signed a document known as a "listing agreement." Go back and read it carefully. Did it contain any language authorizing the activities of your agent? more...

Buyer overpaid because of appraisal error
By Benny Kass, Tuesday, July 8, 2008.

DEAR BENNY: I own a home that I bought approximately three years ago. I was going through my paperwork and realized that my initial appraisal was done on the house and indicated that it contained five acres. However, I bought only 2.5 acres. It appraised at exactly what I bought it for, so what does this mean? I have a loan based on a house that would not have appraised at the selling price when I bought it. --Sherina more...

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