Living In A Motor Home

There are presumably retired people choosing to live in a fancy motor home.  They follow the sun so to speak and move their motor home to camps with great weather through out the year either as their second home or even only home.  It certainly would not be my cup of tea, but I can see some advantages.  I suspect the big fancy motor homes must cost $200,000 or more; though smaller ones would cost less.  It probably would be necessary to tow at least a small car because once you are parked in a camp site, using the motor home to get around is not too practical. 

There are places like Quartzsite in Arizona about 20 miles from the California border that fills up with motor homes, thousands of them, from December - April.  Presumably these are snowbirds coming from cold places that winter in Arizona.  The nearest town is Blight, California and it is not much of a town.  Phoenix is three hours away driving time.  So for serious medical and or shopping or any other amenity it would mean a long drive or helicopter ride. 

Anyone considering this life style really needs to be closer to good medical in particular in case crap happens.  So getting closer into a big city would make more sense.  There are many camp sites all over the country that could accommodate this life style.  Choose wisely in case crap happens.  

Mortgage Foreclosures and Loan Modifications

There are millions of homeowners in the United States that have lost their jobs because of business closures and as a result, they have been unable to make mortgage payments.  Lenders have been prevented so far from foreclosing on those mortgages. The federal government may be extending until the end of the year the prohibition preventing lenders from foreclosing.  That is the good news.

Homeowners in trouble can seek loan modification from their lenders.  It is not an easy process and it takes 60 or more days, but it is possible to get done.  You can ask for a lower interest rate, lower payments, interest only on the loan or other modification that may make it possible to stay in your home. 

Mortgage companies have departments set up to assist with loan modifications.  Don't get frustrated.  Just hang in there and provide the information requested.   Even though the real estate market is hot right now, mortgage companies really do not want to foreclose on your home.  They know that to do so creates a non performing asset for them for some extended period of time.  They would rather work with you to extend your mortgage terms to allow you to stay in your home.  Be patient to make it happen.  

Buying Home Insurance

 If you have a mortgage, the lender will require you to have home insurance to protect their interests.  In essence, when you buy insurance the lender becomes a co-insured.  Home insurance is even more important if your home is paid off.   Many people have done business with the same insurance company for years so when rates go up, we all just end up paying it.  However, when your current provider announces a rate increase, maybe it is a good time to shop the policy with various companies to get the best rate and terms. 

One of the games that some insurance companies play these days is insisting on a deductible that is one percent of value.  So, if your home is worth $350,000 that would be $3,500 out of your pocket before they pay any claim.  It is better to have $1,000 deductible.  You may pay a little more for it, but at least you cap your out of pocket expense in the event you do need to file a claim. 

And, then there is always the fine print.  You may think you have coverage when in fact you don't.  Things like flood and earthquake insurance require riders to get coverage.  In addition, antiques and jewelry of special value would also require riders to be insured.  Ask lots of questions when speaking to the insurance agent to make sure you have the coverage that you need.

Finally, make sure you have enough insurance to cover a total loss of your structure and that means building replacement cost not just a flat amount of money that may not be enough.  Right now the cost of building materials has skyrocketed so you may need more insurance coverage.  The last thing you want in case of a total disaster is haggling with your insurance provider. 

Living In A High Rise Condo

There are many people, usually in big urban cities or near the beach that live in high rise condos.  It is definitely a different life style than living in a single family home, or even a regular condo, or town home.  Some of the more expensive ones and they can cost millions of dollars have terraces to provide some outdoor living; but most do not offer any outdoor space.  There is a distinction between a Co-op that is really buying stock in the building and fee simple condo ownership, which is the same as buying any property. 

In order to buy a Co-op, the Co-op board must approve the sale, which can take weeks or months.   This Blogger is not in favor of that sort of ownership because when it comes time to sell, the seller is at the mercy of the board that must approve the buyer before a sale can take place.   Either way, people who live in high rise building should expect very high Home Owners Association fees.  Many of these buildings have door men and other amenities that can be very expensive.  Occasionally, the building may be tied to a high end hotel that actually provides services to owners in the building.  

Further, high rise buildings may or may not come with any parking under the building So, if you own a car, you may need to make arrangements to buy monthly parking nearby in a parking structure.  High rise living is basically owning an apartment that can be nothing special, or incredibly luxurious for millions of dollars.  This life style is clearly not for everyone.  Before you do it, maybe it would be best to rent an apartment in a high rise building for a few years to make sure the life style is for you. 

Living Life Outdoors

Now that warmer weather is coming our way, people love living life outdoors.   It might relate to our primal past.  This could involve a simple barbeque and a few lounge chairs, or elaborate outdoor kitchens and all sort of outdoor furniture.  Backyards have become an oasis especially including a resort style pool and spa.  The backyard has become an extension of the home's interior like never before. 

More expensive homes often have glass sliding doors that open up indoor space to outdoor space.  Areas that have bugs in summer often have homes with screened in patios, or in some places like Florida, the entire pool area can be covered by a screened in enclosure.  This is to rid the backyard of those mosquitos that everybody hates.

People are spending hundreds of thousands of dollars to make their backyards into incredible entertainment spaces like never before.  Often heaters are added to allow for cooler nights so that using the space in climates where when the sun goes down so do the temperatures.  These can be portable propane, or natural gas or electric installed in the ceilings of patio covers.   And, then there is lighting entire backyards to extend entertainment into the night.

All of this can be very simple, or incredibly extensive and expensive.  The backyard has clearly become a way to make even a small home much bigger as homeowners see the backyard as a place for entertaining family and friends.    

Eliminating the State and Local Tax Limit Deduction

When President Trump implemented his tax cuts, which positively impacted all Americans that pay income taxes, as part of the deal state and local tax deductions were limited to $10,000.  Though you could still deduct home mortgage interest on loans up to $750,000,  state income and property tax deductions were limited to no more than $10,000.  Naturally states like California and New York and others that have very high state income taxes and property taxes screamed because their most wealthy residents were marginally impacted.  

However, since the top federal personal income tax rate went from 39.6% to 36%, it could be argued that giving up this deduction really did not have much impact for high wage earners.  In any case, now that President Biden wants to raise rates again to 39.6% for high wage earners making more than $400,000 a year, blue state members of Congress want to restore the SALT deductions.  Ironically, it really benefits high income earners the most.

The key to all of this is that President Biden is planning the largest tax increase since 1993. Homeowners in particular will need to watch to see how it impacts them.  There will no doubt be winners and losers when the dust settles.  There always is any time they tamper with the tax code.  

Selling Your Home For Sale By Owner - Think Twice

Often people look to save real estate commissions by selling their homes, For Sale By Owner.  Unless you have a friend or relatives interested in buying your home, it may not be the best idea.  Once you put that sign on your front lawn, people you don't know will begin knocking at your door. These could be crooks looking to get into your home to case it out for a robbery.  Or, they could just be nosey lookie lou's interested in seeing your home; in other words, not serious buyers.

Real Estate Agents provide a valuable service.  In addition to exposing your home on the multiple list as the best way to find a qualified buyer, they screen potential buyers.  They don't waste time on lookie lou's and or people that can't possible purchase your home.  They know who they are showing your home to before an appointment is ever made.  Further, they will be there to negotiate the best price and terms and then coordinate the closing through the escrow or title company.  Most important, you don't have a sale until the sale closes and money changes hands.

The agent is there to make sure that the sale closes because otherwise their commission is never paid.  So, the agent is motivated to make the deal happen and to close the sale.  Selling a home and moving is stressful enough.  So before you consider For Sale By Owner, think twice.  It is better to  hire a professional to get the job done for you.

At Paragon Home Resources, we have worked with families all over the United States to sell and buy homes.  We work with the best real estate agents in the local market to get the job done.  And, clients that come through us receive a cash back reward once the sale closes.  We assist with negotiating the best price so that in the end our clients benefit from our assistance.