Conference 7.286::home_work

    
    I think you'll find something on this in the Consumer conference
    on PARITY::.

    I just closed on a refinance 2 weeks ago.  It took about 90 days
    to refinance, my lock-in expired after 60 days.  Even though the
    rate went up around 1%, the bank still gave me my lock-in rate.
    I used the same bank and mortgage originator for both my original
    mortgage and my refinance.  I was very pleased with the bank
    (BankEast).
    
    In New Hampshire, the Attorney General publicly warned the banks
    to honor lock-in commitments if the expiration was not due to the
    fault of the owner.  
     
    You should call the bank and ask that your lock-in rate be honored.
    If they say no, then send a letter to the mortgage originator, the
    president of the bank and the Attorney General.  Don't give up easily.
    
    

        We just had a similar incedent with Westmark Mgtg. co.
    When we applied for the refinancing it was 9.125% , as it 
    turns out.... we got it for 9.75% because the time limit
    was for no more than 40 working days. I did'nt make a stink
    about it because 9.75 was still a good deal. Make sure you
    all read the agreement contracts and ask questions.
    

    See also the discussion in NY1MM::INVESTING (Check the nodename...)

    
    We refinanced a couple months ago and had the same problem.  My
    husband suspected that this would happen, so about 3-4 days before
    the 60 days were up, he started screaming, and we got our rate.
    Last I heard, there was no law that said they ahd to honor their
    commitment (unless it was written),  but I suspect that if you make
    enough noise they may let you have your original rate.  After all,
    it it not your fault that they were 2 months late,  why should you
    have to pay for something that they screwed up.  I know for a fact,
    that if we had not said anything, we would have ended up having
    to pay a higher rate.   The bank may just be taking the additude,
    "well unless the customer complains, use the higher rate."
    
    

      I was wondering if anyone out there has had a situation occur
    where a broker is selling your house, and you find a buyer. The
    question being: Do you get a break on the commission fee? I  am
    buying another home from the same broker who is selling my home
    and wondered what the standard charge would be, or if they give
    you a break. This particular woman will charge me 5% for what my
    house sells for and when I asked her if I'd get a break if I found
    a buyer she did'nt give me a clear answer... any experiances out
    there?

I should be spelt out in the agreement you sign when listing the house. 
Typically, the broker gets the fee, period.  If you find a buyer, and 
you send them to the broker, the broker has to do pretty much the same 
work as if the buyer walked in off the street.  You're expected to help 
in selling your own house, so it is not an extraordinary circumstance 
that you would refer someone.
					>>>==>PStJTT

    .1 is correct.  There's not much you can do if you find a buyer
    and it is listed with a broker.  Sometimes, the broker will be
    nice and give you a break if you both sell and buy thru them,
    but this is not the norm.
    
    If you were interested in finding your own buyer, then you would
    have signed what is called an exclusive agency contract, which states
    that you do not have to pay the commission if you find a buyer.
    
    -al

    re: 0
    
    Brian,
    
    I am licenced Real Estate salesman in Massachusetts (when not a
    DECcie).  In MA, there are three types of arrangements that are
    made between the seller and the real estate broker.  A
    description follows:
    
    	1) Exclusive Right to Sell - this is by far the most common
    type of agreement.  When you find a broker, most of them want to
    to sign this type of listing agreement.  This agreement entitles
    the broker to the agreed upon commission (5% of the selling price
    is a typical rate) no matter who finds the buyer.  This guarentees
    the broker that he/she gets paid for the sale of the house.  Even
    if another broker finds a buyer, the original broker still gets
    a piece.  This is called a co-broke.
    
    	2) Exclusive Agency Listing - This type of agreement is not
    used as much as it probably should.  Many people do not know about
    this type of an agreement.  This agreement entitles the broker to a
    commission if he/she sells it and also frees the seller to try to
    sell it on his/her own with no commission to the broker if the seller
    finds a buyer.  So whoever sells the house wins.  No other broker
    can list the house at the same time however, but other brokers can
    co-broke.
    
    	3) Open Listing - This type of agreement is usually verbal and
    not written.  In this case, the broker gets paid only if he/she
    sells the house.  The seller can try to find a buyer and also has
    the option to allow other brokers to try to sell the house.  This
    is the most open type of arrangement and hence the name "Open Listing".
    
    Just a few words on how brokers view the types of agreements that
    I described above.  With the Exclusive Right to Sell agreement,
    the broker has the most incentive to sell.  He/she knows that if
    the house is sold then a commision is automatic.  The broker is
    more likely to advertise the property and push hard to sell it.
    
    With the Exclusive Agency Listing, there is more of a chance that the
    broker will not make the sale since there is incentive for the seller
    to try to find a buyer.  This type of property usually gets less
    attention from the broker because the risk is higher for him/her.  It
    usually gets advertised but not as agressively.
    
    With an Open Listing, since it is a virtual free for all, very few
    brokers bother to advertise it since the chances of selling the
    property are lower but more brokers can get involved.
    
    So if you are in a hurry to sell your property and don't have much
    time to try to sell it on your own, go with the brokers' favorite
    and use the Exclusive Right to Sell agreement.  If you are not in
    a great hurry and feel that you have a chance to make the sale yourself
    then try the Exclusive agreement.  Use the Open Listing if you want
    to get more than one broker involved and are not in a hurry to sell.
    
    Brian, you said that you wanted some kind of discount for finding
    the buyer on your own.  From experience, finding the buyer can be
    the easiest part of selling the house.  In my opinion, it take much
    more effort from the time that an Offer to Purchase form has been
    signed to the closing than for finding a buyer.  There are many
    things which have to be coordinated which a good broker does well.
    That is where the broker earns his/her commission.  Many people
    do not realize the work that it takes to close on a house.
    
    Hope that I have helped you understand a little about residential
    Real Estate (in Massachusetts at least).  Good luck.
    
    pjc
    

    re: .3
    
    I second the statement that a lot of the real grunt work takes place
    after the P&S, and if you are dealing with a good agent it makes
    things a LOT easier.  We dealt with a good one when we bought a
    house in Westford.  He helped coordinate inspections, find documents,
    advise on how to find mortgage companies, act as fast courier service,
    and a host of services beyond count.  I thought he really earned
    the money.
    

    
    This may have been covered before...has anyone out there got
    any experience in selling their home without the aid of a
    broker?  The idea of not having to shell out the 6% is
    very enticing...but I'd like to know what the pitfalls are.
    
    Any reading recommendations are welcome.
    
    Thanks -
    
    Sue
    

I think there was a note in CONSUMER about just that subject recently.

Paul

    I believe the current Reader's Digest has an article on the topic.
    
    __Rich

    To answer your question fisbo can be to your advantage. But you
    have to work for it. Such as.....
    
                          1.Advertise yourself
                          2.qualify the buyer yourself
                          3.screen out the people that just want to
                            look but are not really interested.
                          4.Put up with the real estate agents who
                            will try to talk you into listing with
                            them.
    This is what I can think off the top of my head being a former agent
    in Ma. Note that about 1% of people sell there house on there own.
    Hope this info helps.

I'm currently selling my condo by myself (anyone interested? its in 
excellent condition - see note 19.38).  Now, I must admit selling a
condo is easier than a house, because once a buyer gets hooked on a
development, he usually goes out of his way to see ALL the available
units on the market. Nevertheless, I have to take issue with the
difficulty level suggested in the prior note: 

1.Advertise yourself
	just a question of writing a good advertisement
	and calling it into the proper paper.

2. Qualify the buyer yourself
	My experience is that realtors don't do all that complete a job.
	In my recent househunting, the realtor accepted my target price range 
	and didn't ask about financial details until I was ready to place an 
	offer, and even then all they wanted to know was gross income.

	I think almost anybody can calculate a monthly mortgage payment, and
	see if the buyer meets Fannie Mae's 28% and 36% guidelines. 
	What sellers really do is require in the offer that the Buyer
	APPLY for a mortgage within 5 days - if no bank will take 
	their application, the house goes back on the market.  In 
	fact, you don't HAVE to take the house OFF the market until
	the P & S is signed, you can continue to take sealed 'backup' 
	offers.


3.screen out the people that just want to look but are not really interested.

	Again - can realtors really do this?  If someone was 'just
	looking' I wouls suspect that they would act as if they're
	more serious so that realtors and sellers will take them
	seriously - and no realtor is going to second-guess the
	proported seriousness of a potential client

4.Put up with the real estate agents who will try to talk you into listing with
  them.

	Just say no thank you and hang up the phone.

HOWEVER:  You do have to have an offer agreement drawn up that your 
potential buyer can use.  You can start by getting the Boston Realtor 
Board form and tailor to fit.  AND, of course, you have to choose a 
selling price (-easy in a condo, harder in a house).

If you have time - its worth a shot for a few weeks, you can always 
use a realtor later.  (In fact, if you know who you might use, they'd 
probably be willing to come over and do a 'market survey' FREE, and 
return for you selling thru them IF you can't sell it yourself).

    I just recently completed a FSBO.
    
    	- One thing that came in handy was a phone answering machine.
    	- Make yourself a FSBO sign and put it out on the lawn like
    	  a realtor would.
    	- Get some of the flourescent orange "House For Sale" signs
    	  from the hardware store and point them to your house.
    	- General rule of thumb: out of every 10 people who even
    		show up at your house, only 1 will be remotely interested.
    		The other 9 are tire kickers.
    
    	  For every person that shows up, 3 or 4 brokers will show up
    	and you will force you to spend your time fending them off.
    	They will give you horror stories about FSBOs.  That means for
    	that 1 potential buyer, you'll have to deal with 30 realtors
    	and 9 tire kickers.
    
    	- Also forget having any weekends to yourself.
    	- The real estate advertising rags are off limits to non-realtors.
	  All the RE people have formed a tight knit group to prevent
    	  FSBOs since that directly reduces their compensation.
    
    -al

	When I sold, I saw better statistics than .6 sugests: I sold
	after about 5 showings, 12 calls, and 3 agent inquiries.
	This was Summer 1986, in Nashua, N.H. -- not a slow market.

	My ad said something like "20%-qualified principals only".
	One respondent asked what that meant ("If you don't have 20% of
	the price for a down payment, bye, bye!").

	I didn't return calls to agents, except one, who didn't identify
	herself as an agent in her message.  Oddly, she was quite
	courteous, and presumably did a CMA for me, against the hope
	I would list with her after I gave up.  I never followed through
	on the CMA because I sold the house.  (She phoned me to see how I
	was doing, and seemed surprised I had sold, and also at the price
	I received.  Too bad I didn't ask whether she had come up with a
	market price.  I was diffident about tapping somone's work without
	paying for it.  What a dummy.)

	If you have your house appraised, remember to "consider the source".
	Bank-type appraisers seem low.  In the Nashua area, I automatically
	added about 30% to their number, last year.

	RE agents suggest a low price.  They need traffic.  A few lost
	$$$ is a small price to get those houses moving.  In some other
	Notes file, I suggested FSBOers reflect upon the relative
	importance of $10,000 to the seller, and 6% of $10,000 to the
	agent, versus 1 or 2 months of time to the agent.

	By all means follow the suggestion to use an answering machine.
	My favorite respondent recorded "I don't talk to no damn machine!"

	Write up a paper that says what you're selling.  Stick to it.
	Don't say "Yes! The TV's are included!  Yes, Yes!  The laundry
	in the dryer stays!  Anything you want!!!  Just buy the damn
	house!"  Don't be bamboozled by the jerk who tries to get your
	price down by putting your house down.  As soon as you decide
	to sell your house, it turns into a dump.  You already know that,
	so you don't need some stooge telling you.  After critically
	eyeing the innards of a house I sold a few years ago, one guy
	phoned me to tell me about another house, much better than mine,
	selling for a lower price!  I thanked him for the information,
	promised to consider it carefully, hung up the phone, and fell
	down on the floor laughing.

	Finally, scale the job properly.  Don't think you can sell your
	$400,000 palace, or even your $50,000 palace, casually.  You have
	to pay attention.  If you haven't bought & sold a couple of times,
	get an agent and learn what to do.  Ignore amateurs' advice, and
	see a lawyer (before you start).

	Regards, Robert.

    I sold my Bradford MA condo myself, Sept 84. The Merrimack Valley
    revitalization had just about peaked and real estate had also. I
    got an estimate, mentioned to a few people in the development, and
    had a buyer (7% above estimate) without 1 cent in advertising!
    His bank did'nt think is was quite worth the price, but he put enuf
    down to cover what they thought it was too high by.
    That was a classic seller's market, things are a little different
    now. (sigh)
    I would DEFINATELY get a lawyer. Cost me $250, and most of the
    running around, (well you need this form, and this signed by the
    association, etc) but I never had any doubts that the sale would
    not go smoothly. I had never done a FSOB before, but after my 
    experience, I can't see ever doing otherwise.
    
    Good luck
    
    John
    
    
    
    I'll never go thru an agent!

	There's a Real Estate paper published for people selling their
own homes.  It's called "FOR SALE BY OWNER" (catchy huh?).  Don't know if
serious buyers read it but the address is Park Place, 203-East, North Reading,
Ma. 01864.  The tel. # is 1-617-664-0343.  It's one of those free papers you 
see in delis and such.

Good luck and let us know how you make out.


George

	Friends of mine just sold there house in Southboro on their
    	own.  I would say they made out pretty well on their own.
    
    	About 7 months ago they had decided to put there house up for
    	sale.  They went thru a realtor.  The asking price was $174,000.00
    	First of all, I never saw an ad in the paper for it.  They couldn't
    	find a buyer and our friends decided to take it off the market.
    
    	About a month ago, they decided to start looking for a new house
    	again.  This time they put the house on the market FSBO.  They
    	advertised in the Middlesex and Worcester Telegram.  They had
    	an open house.  One week later they had a P&S signed with a
    	qualifyed buyer who already had a mortgage approved.  
    
    	The clincher - they sold the house for 191,000.00.  They maybe
    	sunk 300.00 into advertising and 600.00 for a lawyer to handle
    	everything including closing.   
    	
    	They had quite a good ad too.  He said he just went through the paper 
    	and found ads that caught his eye and tried to write his like 
    	that.  I believe the people were from the Worcester area too.  
    	People out west are looking to come east so be sure to advertise
    	there too.

    It is my understanding that the federal (state?) government is making
    interest free loans available to middle income homeowners for energy
    conserving improvements such as insulation, furnace upgrades etc. Does
    anyone know the details and how to apply/qualify. 
        
    - Rich

    Hi Rich -- yes, there are such things available. I don't know where
    you live, but in the greater Fitchburg area, I contacted FACE -
    Fundamental Action To Conserve Energy
    
    P.O. Box 2346
    75 Day St
    Fitchburg, Ma  01420
    
    TEL: 617-345-5385
    Attn: Sheila Carman
    
    Perhaps if you contact them, they can tell you about the equivalent
    agency for your area. The standards for qualifying depend on your
    family size and income, but seem to be quite reasonable.
    
    You have to have an energy audit (available thru your utility service),
    and three estimates for whatever improvements you want made.
    
    Sheila is sending me more info on the program. When I get it, I'll
    post it here.
    
    Check it out...
    
    Stel
    

    Hello Again,
    
    I am trying to figure out how to invest my money in a soon to be
    mine three family.  Has anyone ever done an analysis of what sorts
    of investments/improvements yield the highest return.  Something
    along the lines of:
    
    	$ Increase in Property Value / $ Invested in Improvement
    
    		= Investment Efficiency Ratio
    
    I suppose that a similar list could be compiled for work that falls
    into the category of maintenance which preserves the existing value.
    
    Craig "Mr. Maximize Return"

    Yes, I've seen several articles recently that address this topic.
    I have them at home and will bring them in tomorrow.  The improvements
    vary according to location, though. (pool in Florida is a +, in
    New Hampshire a -)  For a 3 family investment property I would say
    the best improvements are the cheapest ones that get the job done.
    
    Phil

    
    Practical Homeowner did an article on exactly that a couple months
    ago.
    
    The highest return at resale according to the article is from:
    
    1.  Paint and Paper.   Brightening and freshening up the place make
                           it look more attractive, and well maintained.
    
    2 and 3.  Kitchen and Bathroom improvements.  i.e., installing new
              plumbing fixtures, ceramic tile, modern cabinets, glass
              shower doors, new floor, add some outlets etc.  These 
              are the rooms which get the most use, so that's why they
              are more important.
             
    
    In a 3-decker, these improvements will increase the rent value of
    the units along with the value of the property.
    
                                 
    -Steve

    I am in the process of building a coal bin which will be attached 
    to my house. I removed the garage door from the basement and replaced
    it with a wall built of 5/8" CDX over 2 by 4's.  The bin will be
    6' high by 8' long by 4' deep and will have a shingled, hinged roof
    on it so it can be loaded from the top. A sliding door at the back
    will allow me to extract coal from inside the house in the winter.
    
    My question is: how should I finish the plywood siding on the house.
    The coal will rest directly against this wall and the other side of
    the wall will be insulated.  There is not very much abrasion when
    the coal is delivered and, although it is wet when delivered, the
    coal soon dries out. Otherwise, it would be tough to shovel it out
    once it froze solid.  Would it suffice to cover the wall with roofing
    paper alone or should I paint or use some preservative in addition
    to the paper?  I had a bin in use in the same location for the past
    six years and there was no protective finish on the inside, but
    this was a free-standing box, about 6" from the house. There is
    no apparent damage to the wood. (I'm replacing it because we had
    to dismantle it to build a new driveway, and because I want more
    capacity.)                                                  
    
    Dave

A couple of coats of Cuprinol style stain would be an idea.  This would
prevent the plywood from getting wet and warping/rotting...


					*J*

    Sounds like putting some roofing paper on the wall would work OK.
    You're right that the coal won't hurt the wall and probably all
    that will happen is the wall will get dirty.
    
    -willie
    

  Has anybody had any experience with building loans from a bank. I'd
like to find out what they require if your gonna be doing most of the work
yourself. And how many bids are needed for the work that I'm contracting
    out. I'm thinking of doing as much as possable with cash on hand
    and then approching the bank.  Does this sound too risky ?

 thanks , gerry

    The best deal I found (Concord, Manchester, NH and environs) was at
    Souhegan National Bank, Milford, NH.  They want "estimates" broken
    down into 15 - 20 categores (foundation, framing, plumbing, etc.).
    They want floor plan/elevations so they could see roughly what the
    finished product would look like.  They want to look at the lot.

    If you're approved they'll give you a blank check book, in effect.
    You get a bill from the plumber, give Souhegan a phone call, put the
    bill in the mail, and write the plumber a check - same day.  You pay
    interest only on the amounts you've drawn, payable quarterly.
    At move-in time (vaguely defined, but practical), the loan rolls into
    a variable-rate mortgage, with attorneys' fees only (no points).

    I haven't applied yet, but expect to soon.

    I recommend the Milford Co-Op Bank, which is also in Milford, NH.(this
    assumes you are in southern NH). There are not alot of banks out
    there that will give someone a construction loan. You should be
    able to give examples of your creditability as a project (construction)
    manager, carpentry, etc., experience. This more or less applies
    if you plan on doing most of the work yourself. If you plan to hire
    a general contractor or serve as the G.C. yourself and not perform
    alot of the major work, the banks may be more receptive. I might
    add that I've had some experience handling numerous types of
    construction projects and am presently completing my newest home.
    If you do plan on building your own home and have not ever built
    a home before, I recommend that you do alot of research concerning
    the impact both physically and mentally it may have on yourself
    as well as your family. Although extremely gratifying, the building
    of one's home can put a strain on a marriage (especially if you
    have small kids that are too young to help and require alot of your
    attention. I don't want to discourage anyone from discovering their
    ammerican dream, I just want inexperienced potential home builders
    to understand the commentments/sacrifices which usually are inherent
    in  projects of this magnitude. 

RE:1529.1 

>A couple of coats of Cuprinol style stain would be an idea.  This would
>prevent the plywood from getting wet and warping/rotting...

	I'd agree with this but eliminate the roofing paper outside and 
	add a moisture barrier inside.  This way you'll be insulated and
	not trapping any moisture inside your wall or underneath the felt
	paper.  You want that plywood to breathe and since it won't be seen.

	Good Luck - Randy

    
    I'd like to throw a new twist in here...
    
    I would like to get a mortgae on a piece of land and take out 
    a construction-style loan with the hopes of eventually combining
    the land mortgage and final total of the construction loan into
    a single mortgage (I'd prefer a Convertible to a Variable or fixed).
    
    Any idea if this is possible in NH?  I've heard horror stories about
    Mass. requiring that the land be fully paid for before you build,
    which in this day and age when land costs more than the house is
    a tad unrealistic.
    
    				Any ideas/suggestions?
    
    							* MAC *
    

    
    	RE: .3
                                                                       
    	No problem with the theory, but banks frown on land loans and
    if they do give them they are at a high rate.  I was thinking of
    doing the same thing, but luckily found a seller who was willing
    to finance.  Back when home mortgages were fixed at 8.75 to 9 per-
    cent range, land loans were going for 13 percent with a maximum
    10 year payback.  You WILL be able to buy the land and build the
    house with the same construction loan however.  My advice about
    banks and construction loans is, to inquire first hand with a bank
    officer instead of getting your hopes up (or down) with opinions
    such as my own or anyone elses.  Loan info. etc, etc, change too
    quickly.  I relied on some 'helpful' hints from well intentioned
    people and ended up getting disappointed more than once.  A bank
    may do something for one person and something else for another.
    Go right to the source.  (no offense to anyone out there)
    
                 
    
    
    	RE: .2 - referring to domestic stability and constructing a
    	house.
    
    	You hit the nail right on the head (sort of speak).  They 
    should include something about house construction in marriage vows!
    
    
    	One piece of advice I would give is, to sub-contract out
    as much of the work as you can, if not all of it.  There will still
    be plenty enough for you to do.

    I have a current construction loan from Hudson (MA.) Savings. They
    are a small bank so only do loans for surrounding area. If interested,
    ask for Gerry Curley.
    
    I also spoke with Concord Co-op and Lexington Savings. They are
    two of the biggies in this area for construction loans.
    
    They all work as .1 suggested. You can sometimes (Concord Co-op
    was willing to do it for me but I chose not to) get the loan officer
    to combine loans (construction, personal, equity, etc.) to get enough
    for the land and house. They are mainly interested in the end result
    being worth > 105% of what the final mortgage will be.
    
    Another thing to keep in mind is that if you own the land, or most
    of it, it becomes your down payment on the final mortgage.
    
    							Mark
    

    
    And...
    
    Definately be prepared for the worst. I've been at this almost 2
    years and still don't have a completed foundation!!!!
    
    Our builder told us recently that of 10 houses he built 2 years
    ago, 7 of the couples are in the process of divorce. We had talked
    to a few of them and they were happy with the building and builder.
    I can't imagine that stats if you get a poor builder.
    
    						Mark
    

    Thanks for the responses. I'll go with the Cuprinol.
    
    Next question:  I talked to the folks at National Coal Co. in Worcester
    and they said that if I wanted it, they would supply me with coal
    that had been rinsed/soaked/hosed with #2 diesel fuel to help minimize
    the coal dust that tends to accumulate in the basement and family
    room (no additional cost). The only problem they said it may cause
    is the aroma of the fuel. 
    
    Has anybody used treated coal?  Is there an objectionable odor?
    Will there be a problem with the oil soaking into the plywood of
    the coal bin?   Is there an additional fire hazard?
    
    Dave

                       -< Coal treated with diesel oil. >-
Re .-1

Well, last Monday we got a delivery of 3 tons of oil treated coal. Immediately,
the whole basement began to smell of oil, and within a short time, the rest of
the house did also. Each bucket of coal we bring upstairs must be kept outside
on the patio or the smell nearly drives us out of the family room. My son's
bedroom is in the basement and the smell made him so ill that he missed school
the next day. I called the coal company, an oil company and a hazardous waste
disposal company and none of them had any suggestion as to how to get rid of the
smell. I thought of hosing down the coal in the bin with detergent to try to
rinse the oil down the driveway but that would pollute the neighborhood (better
them than me ]:^(  ) and would leave the coal so wet that when it freezes, it
would be impossible to shovel it out of the bin. 

Short of dismantling the bin and having the coal removed and replaced ($$$) what
other options do I have? The dealer indicated that he has other customer(s?) who
use oiled coal with no complaints, and he led me to believe that the smell would
not be TOO objectionable. Do I have any legal recourse? What really scares me is
that I ordered 3 tons, enough to last me into February or March of 1989.  HELP! 
    
    Dave 

Time and ventilation may ease up on the smell.  I don't think it is a 
good idea to wet the coal though.  As I recall, wet coal invites 
spontaneous combustion.  I don't remember why, and it may be only 
certain kinds of coal that will do it.  You should ask your supplier 
or the fire department first.
					>>>==>PStJTT

Re .-1

From a fireman friend of mine, the spontaneous combustion problem only applies
to large quantities (many tons) of coal. 

Any other comments? Legal advise?

Dave

I requested a copy of my house's assessment from the town because of a
question about how much land we were being taxed for. However, upon
looking over the assessment, there seem to be several points where the
house has been over-assessed (too much square footage, air conditioning,
things like that). Anyway, I'm going to talk to the town assessors and
I'm wondering what other's experiences have been. I'm interested in
making my points, but I'm not really sure that I want to trigger a
re-assessment. There are no new improvements to the house, but there
are points that could be used to increase my assessment (I presume)
even if I did win my points. Are these things adversarial or amicable?
Should I go in armed to the teeth (we have *alot* of documentation on
the house and it's design). Anyone have a tale to tell? The town is in 
Mass.

My Parents house in Framingham had the same problem as .0 a year ago. The
Town "over-assesed" the following items:

o	Full basement	;Fact is the house has a 1/4 basement

o	4 Car Garage	;They own a large barn, that can only hold one
			;car due to the way the support beams are placed.  The
			;town also wrote the "garage" as having water/electric
			;feeds also.  There are none.

Other families (5) had the same problem on the street.   It must have been
an overly zealous assessor that day who was making the rounds.   End story
being the property was re-assesed for a lower value.

    My mother had her house assessed a few years ago to the tune
    of 21.5 bathrooms for an assessed value of ~ 40K just for the
    bathrooms.  (should have been 2 and one half baths not 21.5)
    
    It is really worth checking on your assesment because they don't
    seem to catch even the most outlandish and obvious mistakes.
    Really, I can't believe they didn't question why our house came in
    at over 90K when the rest of the block was at 45-50K!  

>    Really, I can't believe they didn't question why our house came in
>    at over 90K when the rest of the block was at 45-50K!  

They figure if it's wrong, you'll question it.  Most tax offices are 
used to having people challenge the assessment and they aren't offended 
or vindictive when you have it changed.  They will come out and make 
sure that you're telling the truth though.

					>>>==>PStJTT

    I got my tax bill the other day and the assessment was $12,000 over
    the purchase price.  Called town hall and they said. "In the state
    of MASS they can reassess to the fair market price."  Now they also
    tell me anyone will buy the house I am living in for $99 K. and
    that I am not getting charged that price.
    
    I find that very irritating and out of line.  Is this a state that
    will tax you out of your house???  This bill went up $250 a year.
    some people do not consider this much, but I could repair two sets
    of windows with this.  Can they do this every year???

    Not just "can" - in Massachusetts they are REQUIRED to assess
    at 100% fair market value.
    
    On the other hand, I think Proposition 2� limits the amount that
    a town's overall revenue can increase from year to year.
    
    Why do you find it out of line? Should somebody who bought a house
    in 1934 be taxed on a basis of the purchase price, which is probably
    5% of what the identical house next door sold this year? 

Re: .4

If you feel that the assessment is unfair, you can request to see the 
tax valuations of like yours and compare.  If you feel that there are 
houses very much like yours that are being valued at a lower rate, you 
can petition for an abatement.  As I understand it Mass can't re-do the 
valuations more than once every three years.

The property tax problem isn't unique to Mass, and in fact is much worse 
in some other states. NH has a big problem with this; since they don't 
have an income tax (which taxes based on earnings) to make up the bulk
of the state's needed funds, more must be raised from property taxes.
Many retired people must sell their homes because they can't afford to
pay taxes based on valuation of their property.  (Please no flames -- 
I don't want to get into which state is better.  I've lived in both; 
niether is particulary great.)
					>>>==>PStJTT

This note is for questions, answers, and discussion about how home improvements
affect your taxes - any kind of taxes.  What can you deduct?  What can't you?  
What about assessments?  All home-related tax topics are fair game.

 I am 1/2 owner of a house and we saved _Every_ receipt for the year for major
work (moving stairways, walls, new outside stairs) and also for minor work
(sheetrocking, refinishing, repapering) but all this happened at the same time.
At the end of the year, we ran our receipts through datatrieve and came up with
a total but when we presented this to our tax man, he said we must separate
'cosmetic' work from 'improvements'. We had no real way to do this so we just
factored out all proven 'cosmetic' receipts (from wallpapering shops and ones
which matched checks with comments on them) and assumed the others were
'improvements'. 
 We asked but were not given an clear answer about whether cosmetic improvements
are more beneficial than cosmetic improvements. We could have made the above
assumption backwards and slanted most of the receipts towards cosmetics. 

 Any ideas on the tax impact of this? 
 Is the way we decided between cosmetic and improvements valid? Is there a 
better way?

 Kind regards,
-Tom Rezucha

    
    	You might get a more specific answer in the Investing notes
    file (Subway::Investing), but I'll give a shot at it.
    
    	One thing that will affect the answer is whether or not you
    own the property (1/2 or the whole thing) as a principle residence or
    for rental property.  Since I couldn't infer which one it is from
    your note, let me answer it both ways.
    
    Principle residence:
    -------------------
    
    	The cosmetic improvements do not count for anything on your
    income tax.
    
    	Improvements do count, but not "today" -- they count when you
    decide to sell the property.  For example, lets say you bought the
    house for $100K, put $20K worth of improvements into it and later
    sold it for $150K.  Rather than paying taxes (I know, I know, more
    on this in the next paragraph...) on $50K ($150K selling price minus $100
    purchase price), you are allowed to add the cost of improvements
    *to your purchase price*.  In other words, with the $20K in
    improvements, the feds will treat your house as if you purchased
    it for $120K, thus a profit of only $30K.
    
    	If you sell the house as part of a principle residence to principle
    residence swap, you still add the cost of the improvements to the
    purchase price when you carry forward the accumulated profit into
    the new property.
    
    Rental property:
    ---------------
    
    	Cosmetic improvements, as long as you can show they are needed
    to keep the property in rentable condition, are deductable in the
    year they are incurred.
    
    	Improvements are handled the same way as outlined above.  You
    eventually get the tax break, but not until you sell the property.
    
    -----------------------------------------------
    
    	So, to answer your question of which is better, it all depends.
    If it is a principle residence, you get no tax breaks from cosmetic
    items and only the defered tax break on improvements.  (At least
    improvements give you *some* eventual tax break.)  On a rental
    property, you can get an immediate tax break on the cosmetic work
    with the defered tax break on improvments.
    
    	As always, though, don't take the word of some random notes
    writer like me.  Check with your tax advisor!
    
    							-craig
                                    

    I think the strategy is to link certain "cosmetic" work with
    "improvements" you are planning.

    For instance, if you paint a room after doing an "improvement".
    The paint can be included as part of the improvement.  Whereas if
    you just painted the room, you don't get any tax benefit.

    This was always my understanding.  Anybody know differently?
    
    Phil

    
    Re: .3
    
    	I think Phil has it correct.  If, in his example, you had to
    repaint due to ripping out part of the wall to install better heating
    vents, it should count as part of the improvement.  My own way of
    looking at it would be to decide if what you're doing is generally
    considered a normal and acceptable part of the job.
    
    	Of course, there is always one big problem.  While you and I
    might agree to what is "reasonable", the IRS is noted for not always
    sharing in such opinions!
    
    							-c

re Note 1883.2 by CRAIG::YANKES:

>     If it is a principle residence, you get no tax breaks from cosmetic
>     items and only the defered tax break on improvements.  (At least
>     improvements give you *some* eventual tax break.)  

Actually, the cost of improvements CAN determine whether you can fully deduct
mortgage/second mortgage interest.  The interest, to be fully deductible, must
be on a mortgage principal that is less than or equal to the cost of the
residence plus improvements.  (There are exceptions;  I am not an accountant,
and I stand behind my advice just the way the IRS does. :-)

Bob

    Re: .5
    
    	Well, I have to admit that you're right.  I could also stretch
    the topic a bit, though, and suggest that since the benefit would
    be on _future_ second mortgages, it still fit under my statement of
    "some eventual tax break". ;-)
    
    	The question I was answering was: "I paid these bills, are they
    deductable?"   
    
    							-craig

RE: .2...
>    Principle residence:
>    	Improvements do count, [...]when you decide to sell the property.
>    Rental property:
>    	Improvements are handled the same way as outlined above.  You
>    eventually get the tax break, but not until you sell the property.

    Not quite. Major improvements to the property (new roof, heating
    system, etc.) can be depreciated over several years.  The amount of
    depreciation allowed each year is a tax deduction in that year.
    However, all depreciation taken lowers your basis (and increases
    taxable gain) when the property is sold.
    
    Repairs (replacing defective plumbing, etc.) are fully deductible
    in the year performed.  The line between repairs and improvements
    can get a little fuzzy at times. 
    
    Depreciation rules and methods have changed substantially this year,
    along with a lot of other tax laws.  The IRS has a publication that
    explains things fairly well.
    

         There has been talk of selling through real estate agencys
    and selling by owner.  My wife and I have been seriously concidering
    going through an auctioneer.  It sounds pretty good.  Has anyone
    out there ever sold their house this way?  They do all the advertising,
    they get $6000.00 from people interested in attending the auction,
    and they get a guarentee that the bidders will be able to close
    within 30 days of the auction.  If we don't get the pre-agreed on
    minimum price, the house doesn't get sold and the auctioneer doesn't
    get his fee.  Like I said, it sounds good to me.
    
         Chris D.
    
    p.s. Yes George P., after many delays it looks like we'll finaly
    be puting up our new house.

	Sounds very good, indeed.

	Let us know what you learn.

	Also, consult TALLIS::REAL_ESTATE  (Notes command "Select", or KP7,
	or something).

	Regards, Robert.

    Well!....it's about time.

    George

    RE: .2
    
    �     Well!....it's about time.
    
    For what?
    -al

    re: .3  What .02 is refering to is that I was supposed to start
    the process of selling my current house and puting up a new one
    about a year ago.  With all the beurocratic B.S. I had to go through
    with the town for variences, we are a year behind schedule.
    
    Chris D.

    Has anybody heard any good or bad things about this "Help-You-Sell"
    outfit?  They charged a fixed price to help you sell your house
    not a percentage of the selling price.
    
    Phil

    
    I'm not sure if it is the same company or not, but I did hear of
    one that charges a registration fee ($650 I believe) to match your
    house to buyers that register with the company.  The process is
    done by computer by matching the desires of interested buyers with
    the features the seller lists on the registration questionnaire.
    The process is almost identical to that of "Cariffics" (I think), where
    the prospective buyer of a used car gets a computer printout of
    all current sellers of the car he/she is hunting for.  I went this
    route when trying to sell a Camaro (popular car, right!).  I got
    a printout of all those who called to find that particular style
    car in the Boston area = 1 name and nobody ever called me in 4 months.
    
    The overall idea is a pretty good one; since the seller would not
    have to part with 6% to a broker and would not have to advertise
    endlessly in local/regional papers if selling on his/her own.  The
    problem is that the service is not widely advertised and few know
    it even exists.  Your house may be on the market for months without
    anyone even contacting you.  The head of the company, who appeared
    on a financial show this past Sunday AM on Channell 56, claimed
    that the success rate is quite good.  He mentioned one case where
    a person put his house up for sale and had 200 matches to his house.
    He received 3 offers immediately and sold within 6 days of registering.
    It may be worth a shot, but it also may be a waste of time and $600+.
    
    Rick

    RE: .6
    
    I don't think its the same thing.  I don't think they attempt to
    do any "computer matching".
    
    Phil

    RE: .5
    
    Help-You-Sell bills itself as a "merger of real estate counseling,
    traditional real estate and marketing...where buyers and sellers
    can save."
    
    Sort of halfway between the regular RE companies and the FSBOs (For
    Sale by Owners).
    
    They charge a flat fee of $2950 payable at closing only if the
    property sells. There is NO ADVANCE FEE!
    
    What you do: show your property (they'll also show it for an additional
                  $500)
    
    What they do: advertise your property weekly
                  send out specific ads to buyers who have contacted
                       them - not a computerized buying service
                  help the buyer obtain financing
                  lend you "For Sale" and "Open House" signs
                  help with escrow/settlement
                  give you a review of closing costs and your net $
                  
    
    They are members of the Multiple Listing Service and licensed Realtors.
 
    They also have a full refund if you're not satisfied.
                                                                            
    You save on the customary 6% real estate commission. For the average
    around here of $9,000 it works out to Help-You-Sell's cost of 2%
    of sale. 
    
    They have 318 offices and have been doing business for 11 years.
    
    Locally, they're at 12 Worcester Street
                        West Boylston, MA 01583
                        617 - 835 - 2222  or 422 - 8870
    
    This info comes from their own mailing. I have not done any business
    with them but it sounds as if they might offer a real alternative
    to the high costs of "professional real estate agencies".  
                       

    Has anyone in notesland used Help-U-Sell for a sale, or have any
    other feedback, (hearsay, rumor, testimonials).
    
    Mike S.
    

    I am a licensed salesperson. I am also looking to purchase my first
    home along with my boyfriend. The problem is I've been told that
    if I cobroke with another real estate office that there will be
    a conflict of interest because the other broker will be representing
    both myself as the buyer and the seller as well. I just want to
    save myself a few bucks!!Any ideas or suggestions?? thanks, Heidi
    

Correct me if I am wrong, but I've been told that *all* the brokers 
in the transaction legally represent the interests of the seller.
I don't think the buyer can represent the interests of the seller
without a conflict of interest... If you are a trained real esate
salesperson, didn't they tell you this in your training?

One solution might be to negotiate with the listing broker for
a rebate on his/her commission, which just happens to be equal
to the amount that would be given up due to co-broking.

	Larry

    Thanks for your help. No they do not cover this in real estate training
    perhaps because it delves into the legal aspects which our lawyer
    would cover. I don't know. I can't foresee what, if any, problems
    might arise with this situation. We did think about negotiating
    on the price (bringing it down to what we could afford) then forgetting
    about the cobroke altogether. This way we get a deal and the other
    broker keeps the whole commission. The seller pays; either way it's
    just whether the commission is split or not. I just wish the broker
    would worry about the seller and let us worry about us.?!
    

    If you are associated with a real estate office then you can 
    represent yourself as buyers agent.  I've done it.  Some agencys
    that may have a listing might give you a hard time because they
    want to keep the whole commision to themselves.  If they do, have
    your sales manager talk to their sales manager.  If they still
    give you grief don't give them your business.               
    
    However if you are not associated with a real estate office who
    participates on MLS, you will not be able to get a chunk of the
    commision.  Otherwords having a salesperson license does not
    give you the right towards a commision.  You must be registered
    as a salesperson with a registered real estate office.
    
    Mark.
    

    Yes, I am legally registered with my father as a licenced salesperson.
    I am inactive in sales, until his lots begin being sold. I realize
    the guy may also want to keep the whole comm. if possible because
    its his own office. The house belongs to a relative of his wife. 
    If you have done this before how did you work out your deal
    representing yourself as the buyers agent? thanks again....Heidi
    

    
    Are you going to do some energy efficient projects more than
    $1000 but less than $12,000?*
    Do you make < $75,000 (Gross wages + other income)?
    Do you need or want to borrow?

    Massachusetts has a deal for you. 

    We are in the market to do some energy efficient projects 
    in our home, specifically replacement windows and a new wood 
    stove. Along the way we were told of Mass Save's program of 
    0% home energy loans. I've heard of this program for low 
    income families but not for moderate income. Well, the loans 
    are there for people who make less than $75,000 (Gross wages 
    + other income), who get an energy audit from Mass Save ($10 
    per unit or home), who are going to use the money for energy 
    efficient improvements, and who chose to get a contractor from 
    the Mass Save's qualified contractor list. The list is extensive 
    and I doubt that you'd have any problem finding a contractor 
    that you like. 
    
    Massachusetts is giving the monies it received from the oil 
    companies, when they got bagged for the overpricing, back to the 
    public by offering these loans. The banks lend you the money and 
    Mass prepays the interest (up to $4000 per household) on the loan, 
    maximum term on the loan is 5 years and the loan is regarded as
    a home improvement loan.
         
    Just thought I'd pass this along for those who didn't know.
    If you're interested, call them. If you'd like the contractor's
    listing send me a note and I'll send a copy along via DECmail.
    
    wayne
    

    
    			WHAT APPLIES
    
    	I am in the process of planning an addition to my house which
    will consist of a sun room.  Since the sun room is 95% windows,
    will this qualify for the 0% energy loan.  Does it have to be just
    windows or heating systems.  Also, any recommendations for installers
    of a sun room.  What are the going $$ per sq.foot?  
    
    
    DAN
    
    

I don't suppose that a loan for materials, that you install yourself,
would be allowed?  

	Larry

    
    
    re: -1. I don't know if this applies to new additions but give them
    a call and specifically ask to talk to someone about the 0% loans.
    I don't have the numbers handy but will post them here tomorrow.
    
    re: -2. Yes, materials can be bought and installed by the homeowner.
    
    

I don't know if this applies to Massachusetts but my mom got one 
of these 0% loans in New Jersey.  The deal is you have the energy 
audit done first.  If the audit indicates you need new windows 
you can get a loan (if you qualify and use an approved supplier)
to replace the windows.   If the audit says you only need to 
caulk the existing windows than that's all you can use the loan 
for.  Same for things like doors, wall/ceiling insulation, 
heating plants, water heaters, etc.  In other words the energy 
audit dictates what can or can't be done with the loan funds.

-JFK- (I doubt the energy audit will show you need a sun room)

    
       I just got one of these loans for my 60 year old house in worc.
    (when I say just got I mean I get the money tomorrow). 
       The process was simple. The loan is actually sponsored my mass.
    electric. All I did was call MassSave and they lined up an energy
    audit for my house. The audit was done in about 20 mins by a separate
    company. They gave me a report that said what I should do to make
    my home more energy efficient. This included giving me a G E screw
    in flouresant light that normally goes for about 12-14 dollars alone.
    they also gave me a water saver for my faucets and showers.
       There was also a computer printout that said what my approximate
    savings will be if I replace different things in the house, such
    as a new insulated door, new windows ,insulation etc etc.
       I got hte loan for 6 new windows. (they have to be a certain
    R value to qualify) A bunch of insulation and a new insulated steel
    door. 
    
       what the loan will not pay for is the sheetrock I will have to
    replace when I rip it out to do the insulating (Its in tough shape
    anyway) or any other construction material I will need make changes
    in the house. It also will not pay for new construction projects.
    
       All in all it is a great deal for helping people who need to
    do the improvments but don't have an excess of money to do it with.
      I am also doing all of the work myself.
    
                                   John C.
    

                         
    
    This is the address and phone number to contact for any Mass 
    Save HEAT Questions. MASS-SAVE, Inc.
    			 200 Fifth Ave.
    			 Waltham, Ma. 01420
    			 (800) 792-5260

    They have various offices serving Massachusetts and this number
    can help you get the one you need for your town.
    
    What is HEAT? It's a zero-interest home energy improvement loan
    for homeowners and tennants of residential properties.

    HEAT will subsidize up to $4000 worth of interest for five years
    on a conventional home improvement loan.
    
    The ammount you borrow must be more than $1000.
    
    Any Massachusetts households with a gross annual income of less
    than $75,000 can qualify.

    This is what we went through.
    
    Schedule a home energy audit by calling the above number and also
    ask for the package for the 0% home energy improvement loans.
    
    Before the energy audit we obtained estimates for the work we wanted
    to do. DO NOT SIGN ANY CONTRACTS BEFORE INTERVIEWING WITH MASS SAVE.
    Mass save does have a contractor referral program where Mass save
    will give you an estimate of what the maximum amount the work will
    cost and if you're satisfied they will send a contractor, selected
    from a queue of pre-approved participent contractors, who will give
    you a written estimate of less or no more than the Mass save estimate.
    
    We had the energy audit done within 2 weeks, they did the same as
    re: -.5. $10 a unit (home or appartment) I have a 2 family ($20)
    and it took the surveyer 2 hours to complete but we did talk a lot.
    
    We scheduled an appointment with the Waltham office, brought our
    estimates, last years taxes with W-2's, assets and indebtedness,
    any of Mass Save's required forms and the energy audits. The 
    financial stuff was only necessary if we wanted to apply for the
    loan at their office.
    
    They approved our financial situation and the work(contractor
    and price) then they helped us fill a loan application to one 
    of our local banks. We should get some word from the bank in a 
    couple of weeks. 
    
    The work done to your home need not be done by a contractor but
    if it is done by a contractor the contractor must be on their
    contractor's list. If you're doing the work, you need only
    supply the quote for the supplies from any supplier. Mass save
    does not check suppliers.
    
    Hope this helps, Good lock.
    wayne

>    At any rate....I don't know if it's worth it or not BUT....being
>    home owners wouldn't you rather have a loan and pay interest so
>    that the interest is a tax-deduction for you?

A deduction is not the same as getting something for free.  For example, 
if you were in a 25% tax bracket (wouldn't that be great?) then for 
every dollar of deductable expense, you can avoid paying 25 cents of 
tax.  The other 75 cents is just plain gone.  So at tax time, you feel a 
little better when you can knock down your tax bill a bit, but the 
amount that comes off never equals the amount you spent.

Someone told me the other day "the only tax shelter that saves you 
money is the one you lie about."  Unfortunately true.

					>>>==>PStJTT

    re .7 and .8 Not to mention the fact that consumer interest isn't
                 fully deductible anymore, and will be phased out
                 all together in 1989 I believe. Whatever the case
                 I know I'd rather pay no interest and have no deduction
                 than the other way around. Just imagine the house you
                 could afford with a no interest loan...
    
                 Keith
    

    Getting back to Mass. Save and 0% loans, I believe the lending
    institution has to be qualified or willing to offer this type of
    loan. DCU is on the list of lenders, if anybody cares.

    re: -.11
    
    We didn't need to contact anyone else but Mass Save. Mass 
    Save asked me what utility companies we had and that was 
    all. I did need to contact another Mass Save number to 
    arrange for the audit. So I don't know.......... Different
    towns, different rules?
    
    wayne
    
    

    What are the requirements for a building loan?  In our case, we
    just bought the house, so we don't have any equity for a home-equity
    loan.  On the other hand, our ratios are well below the normal ratios
    for first mortgages.  How easy or difficult would it be to get a
    loan?
    
    We wish to finish the garage, which currently is just a foundation.
    We are planning on getting a general contractor to do the work.
    
       Gary

    
    	I think you'll find that almost every bank has different require-
    ments for a building loan, so the only way to find out for sure
    is to call one.  I think you'll also find that many banks do not
    offer building loans.  One thing I did find in common with most
    banks is that they only finance up to 80% of the estimated cost
    of the project.

    Has anyone out there dealt with DCU for a HEAT loan?  Any problems?
    They told me it would take 3-5 days for them to approve it, but I don't
    know whether to trust them.  (Also asked in BEIRUT::DCU.)

    I have the 0% heat loan with DCU.  It took me about a day because
    I have two other loans with them.  It was very easy.  Once you get
    the money get the work down.  I had to ask for an extension from
    the FACE (Fitchburg energy office) because of the heat.  I wasn't 
    going in the attic to put in insulation when the second floor was 
    90 plus degrees.  They told me that when the time period was over 
    someone would be by to inspect.

    Robin

    Is this DCU heat loan deal strickly a Mass. program or does N.H.
    have something similar?
    
    Ross

   I believe it's for Mass. residents only.  We're going through the
    process right now to have a new heating system installed.  The
    household income must be less than 75K.  
    
    					Steve

  Has anyone recently taken a home equity loan out to build an addition???
    
    I have heard there are banks and morgage companies that offer fixed
    rates and NO points.  Let me know if such places exsist and what
    is in fine print....
    
                                               Thanks,
                                                       Bill
    

    Where (geographically)?  I recently got a home equity loan,
    it's an adjustable rate, started at 10.75% and can be adjusted 
    each month.  I pay interest only on the the amount I've used, 
    I guess this makes it a home equity line of credit.  I got it 
    at New Hampshire Savings South on Main Street in Nashua (NH).
    There was a one time loan initiation fee of $250.  
    Regards,
    Tom
    

     I am located in Chicopee, MA.,  but if I have to apply to an out
    of state bank thats no problem...
                           

    You might want to peruse the real estate notes file for lots and
    lots of info on home equity loans.  One thing that the ads of course
    fail to mention is the risk factor.  If your house is completely
    leveraged and something happens to you or your income so that you
    can't make payments, the risk of losing the house is much, much
    higher than if you run into problems with a simple first mortgage.
    

    Warning!!! Warning!!!  Warning!!
    
    Be very care on the fine print. Some banks hide a little surprise
    in the payment. You must pay 3% of the outstanding balance plus
    intrest so a $15,000 EQ can run you about a $350 bill each 
    month.
    
                              REK

    
    Re: .4
    
    	Huh???  If that were true, 3% of the $15,000 balance is $450 plus
    roughly $150 in interest (assuming 12%/yr) means the payments start at
    around $600.  If your reading of the fine print is correct, the $350
    figure is way off.
    
    							-c

    I guess I should put better numbers in here... we have a $20,000
    loan out and pay $400 per month on it...
    
                        Rick

      Our  DCU  Home Equity load (a.k.a. "line of credit") requires that
      we pay .015  times  the  outstanding  balance  each  month.   This
      includes  interest  and principle.  The .015 remains constant when
      the interest rate changes.  This approximates a 30 year payoff (or
      a bit less0 for the expected range or interest rates.
      
      Off  hand I'd say that 3% + interst is a bit more than I'd like ot
      commit to paying each month, but that depends on how I vs. You use
      this  credit. 
      
      The  IMPORTANT  point  is  to  ALWAYS  understand  just  what your
      commitment is before entering into ANY load agreement.

        If you buy a new house for less than you sell your old one
        for, what is the 20% capital gains tax formula?
        
sell_price - ( purch_price + improvs )
             
sell_price - ( purch_price + improvs + agent_commision )

sell_price - ( purch_price + improvs + agent_commision + cost_of_new_home )

        - Tony -
        

      < Note 3369.7 by VMSDEV::HAMMOND >

      > The  IMPORTANT  point  is  to  ALWAYS  understand  just  what your
      > commitment is before entering into ANY load agreement.
                                               ^^^^

      And boy, oh boy, do lenders hand you a LOAD!!

      8^{)

      Brian

    There are at least 20 base notes in TALLIS::REAL_ESTATE on this.

I purchased a house in Litchfield, NH in June.  From a copy of the prior owner's
tax bill, I noticed that the assessed value was considerably higher than his
1987 purchase price.  For that matter it was 110% of my purchase price.

I visited the tax office and I am applying for an abatement.  The clerk at the
office effectively said that I'd be wasting my time by filing the application,
and that the town is assessing property based upon the fair market value at
the 1988 assessment.

The clerk said that although my house is not worth that much, if the assessments
were lowered, then the town would just jack up the tax rate.

I have a few questions:

1. Is it legal in NH to assess a property over the fair market value?

2. If so, shouldn't the town specify that the assessments are based upon the
   fair market value times a certain "adjustment factor"?  This would enable
   me to determine if my house were assessed reasonably...

3. What should I do if the town refuses to grant my request?

Thanks,
Peter

    
    You're dealing with the government, and basically there is little
    or nothing you can do. Your only recourse is to take them to court,
    which will cost you more money then probably 10 years of the tax
    differnence. It may be illegal, but so are IRS tactics.
    
    Mike

    Re .7
    
    Welcome to small-town New Hampshire!
    
    It's not worth the fight, economically.  Only you can decide whether
    it's worth it as a matter of principle.
    
    pbm
    

    I recently heard that in the "soft" real estate market of the past
    12-15 months, that some properties had de-valued approximately 12-14%.
    
    I'll second the previous noter's comment:  Ayuh!  Welcome.
    
    	Ted

As a matter of fact, we just got a NH legal opinion on the very subject.
To save you a lawyer's fee, let me summarize:  You as a taxpayer must pay
your "fair share" of running the town.  The shares are divided up as a
"$xx.xx per thousand of valuation."  If the actual market value of your
house has gone down (or up) it is assumed the value of all the property
in town has gone down (or up) by the same percentage amount.  To prevail
in an abatement request, you must show either that (a) your property value
has gone down (or up) MORE than all other property in the same town OR
(b) that properties of equal value in the town are paying less than you
are.

If you think you can squeeze in, have at it, otherwise drop it.  A side 
note is that people in small NH towns have long memories. You're making
your reputation now.
					>>>==>PStJTT

As mentioned in the previous note, the assessment value has little or nothing
to do with the actual purchase price of the house.  As long as all property in
town is assessed at the same rate, it all works out. 

It's not that the town would 'jack up the tax rate' if the town were
reassessed.  To determine the tax rate, they simply pass a budget, and then
divide it by the total assessed valuation of property in the town.  They then
multiply that number (the "tax rate") by everyone's assessed value to determine
the taxes.  If the whole town was reassessed, then they'd just divide by
different numbers, but each person's share would come out about the same. 

Our town uses (I think) a 1981 assessed value.  Our house is valued at about
$80,000, although you could hardly find a house in town selling for less than
$150,000.  If they reassessed to 1989 values, the "tax rate" would be cut in
half, even though everyone would continue paying the same tax. 

Paul 

> < Note 1793.12 by BEING::WEISS "Trade freedom for security-lose both" >

> As mentioned in the previous note, the assessment value has little or nothing
> to do with the actual purchase price of the house.  As long as all property in
> town is assessed at the same rate, it all works out. 

This is not true.  While it holds constant for a given town or city,
local aid figures from the states to these cities and towns are often 
determined by the assessed value of the town and the subsequent tax rate.
It was this situation that forced implementation of the Massachusetts
law some 15 years ago to go to state-wide 100% valuation, and to keep
it at 100% by sufficiently frequent re-evaluations.  Grossly undervalued
cities with artificially high tax rates (20% valuations and 17% tax rates)
could not be easily or fairly compared with more realistically evaluated
locales.

    The question  is what is "Fair market value". My house is assessed
    at  about  $185k,  and  I  bought it for 173k two months after the
    assesment.  When I said that purchase price determined fair market
    value,   the   town  denied  that,  and  said  that  there  is  no
    relationship  between  the two. Funny, when I studied economics, I
    was  told  that  purchase  price  (in an arm's length transaction)
    defined fair market value.  (The town in question is Hudson, MA)

--David

>    The question  is what is "Fair market value". 

If that's the question, then you've answered it.  You now know the fair market
value.  I thought the question was, "can I get my taxes abated?" and the 
answer to that is no.  
					>>>==>PStJTT

    Second thoughts on .7
    
    One of the Litchfield selectmen is active in the PICA::NEW_HAMPSHIRE
    conference.  You might pose this question there and see what reaction
    you get.
    
    pbm
    troublemaker
    

>    The question  is what is "Fair market value". My house is assessed
>    at  about  $185k,  and  I  bought it for 173k two months after the
>    assesment.  When I said that purchase price determined fair market
>    value,   the   town  denied  that,  and  said  that  there  is  no
>    relationship  between  the two. ...

You're right.  As I said in .13, it was fairly-assessed cities and towns
that forced the Massachusetts state law to require 100% valuation,
and now many of the same towns are faced with situations like yours,
where houses are assessed at 107%.  They seem oddly reluctant to reevaulate
downward.  In Mass, 2� is part of the problem.  Towns lose a LOT by reducing
total valuation.  (A lot of money and a lot of fiscal flexibility and a lot 
of future choices.)
Yes, you could sue, and you might win.  In a sense, the town can't afford 
to lose, based on the precedent it would set for other homeowners.  
This gives you a good bargaining position for a negotiated settlement.

- tom]

RE: .15
    They  said  the  assesment  was fair market value, (I believe that
    that's  what's legally required) and wouldn't accept sale price as
    evidence of fair market value.  A bit strange.

    I can't afford to sue for two reasons. It's $100/year in taxes, so
    it  would  take  a  long time to pay for the lawsuit, and it's not
    worth it to get into a fight just after I moved into the town.

--David

    If someone sells you a house for $1, does that mean the fair market
    value of the house is $1?  Of course not.  Fair market value means what
    one should expect to get for a similar house in a similar location 
    under current market conditions.  Determining fair market value is
    what real estate appraisers do.  Two of the three houses I've bought
    I bought at considerably under fair market value.  In both cases I
    found panicky buyers in houses that didn't show well.
    
    					- Vick

    re: .-1
    
    Huh?  What is this, a new neo-economic principle?  If the fair market
    value isn't what the house sells for, I'd like to know what it is?
    (Notwithstanding silly $1 examples).
    
    This comes up in the real estate conference all the time - "my house
    is worth $200K but my best offer is $100K".
    
    The value of your house (fair market or otherwise) is ZERO until
    someone writes you a check.   But someone has to make a guess for
    assessment purposes, but that's all it is - a guess.

    re. -.1  
 
    >If the fair market
    >value isn't what the house sells for, I'd like to know what it is?
    
    I told you what it is in rather simple terms.  You may argue with
    your town that the "fair market value" of you house is $1 because
    your father sold it to you for that much, but they are going to tell
    you that that is not what "fair market value" means.  To understand
    what "fair market value" means, you have to look at the phrase's usage
    in society.  Current usage in society does not equate "fair market
    value" with "recent purchase price".  It just doesn't, no matter how
    much you want it to.  Your town won't buy it, the IRS won't buy it,
    etc.
    					- Vick

>    Current usage in society does not equate "fair market
>    value" with "recent purchase price".  

Yet the point has been made and remains that towns are exceeedingly quick to 
raise the assessment as housing prices rise, but basically need to be 
bludgeoned with heavy objects to get them to lower the assesments as the 
housing prices go down.

Paul

    re: .22
    
    I live in Massachusetts.  By law, my city my re-valuate every three
    years.  That means that two years out of three, the valuation is wrong
    (given non-zero inflation).  As the market value increases, it lags on
    the low side.  As the market value decreases, it lags on the high side.
    
    Reality is hard to fight without drugs.
    
    Also, homeowners are exceedingly quick to complain when the assessment
    is too high, but basically need to be bludgeoned with heavy objects to
    get them to complain about assessments that are too low.
    
    (Sorry, Paul! :-)
    
    Elaine

    Let me make another stab at this:
    
    Fair market value = the maximum amount you can reasonably expect to
    	get for your house if you put it on the market today.
    
    What you paid for it has little to do with that.  You may have paid
    half the fair market value or you may have paid double the fair market
    value.  Determining the fair market value of a property is half art and
    half science.  It isn't easy, and it is never certain how good the
    result is.  In Amherst, NH, where I live, they publish the property
    assessments in a book.  We looked up all our neighbors who had similar
    houses and compared our assessments with theirs.  There was not enough
    discrepancy for us to complain.  In fact, our taxes went down as a
    result of the reassessment, even though the new assessment was for
    more than double the old one.
    						- Vick

    re .21:

    I seem to remember that the IRS talks about "arm's length" transactions
    in defining fair market value.  When your father sells you a house for
    $1, it's not an arm's length transaction.  I think the IRS's other
    criterion is "willing seller and willing buyer."

    Here's the IRS definition from Publication 17 (Nov 88 - new one
    isn't out yet), under "Basis of Property"...
    
    	"Fair market value is the price at which the property would
	change hands between a buyer and a seller, neither being required
    	to buy or sell, and both having reasonable knowledge of all
	the necessary facts.  Sales of similar property, on or about
	the same date, may be helpful in figuring the fair market value
    	of the property."

    Sounds reasonable.

>	the necessary facts.  Sales of similar property, on or about
>	the same date, may be helpful in figuring the fair market value
    	    ^^^^^^^^^
    i.e., the date for which the fair market value is being determined.
    	In the case of an assessment, that should be for the date of the
    	assessment.

    			< THE FACTS>
    
    .26   your facts are correct. That is the definition of fair market
    value. but how is it applied?
    
    	I am an assessor, some what offended after read these last few
    notes, but let me try and explain what Mass. laws is and requires.
    
    
    	1. We do a "Mass Appraisal" NOT a per/house appraisal. What
    that means is that all the similar house that have sold over the
    last three years (tri-annual reassessment) are time factored to
    1/1/xx. these are then tested for a number of statistical proofs
    to find the true value (usually per sq ft.) of the housing stock,
    amenities, detached structures, etc.
    
    	2. your house's fact (size, rooms, floors, etc) are then fed
    into the computer and priced against this norm. These norns will
    vary by house type, neighborhood, condition of house and many other
    variable. All of these variables and prices are listed on your" property
    record card" in the Assessors office. Changes (abatements) are only
    made for factual reasons (wrong data) since the baseline values
    are norms and those norms are certified by the state (by town).
    
    	3.Your Assessors are there to insure that ALL property owners
    are treated fairly and that the norms used are reasonable and the
    the facts (topology, condition of the building, etc) are applied
    consistently.
    
    	Hope this helps.
    
    		John 
    
    

    re: -.1
    That's what I said, it's half art and half science.  John, you may
    not realize it, because you are too close to it, but your items
    1. and 2. are practically unintelligible to anyone but another
    assessor.
    					- Vick

I briefly considered hiding .29, but then decided that the hostility I had read 
into it isn't explicitly there (and it's tough for a moderator to do anything 
about implicit hostility, which is always open to judgement).

So I'll settle for the following:  let's treat the author of .28 as a
legitimate expert who has kindly volunteered some information on a subject 
we're all interested in.  Let's ask respectful questions intended to draw out 
useful facts.  Let's not treat him as many homeowners no doubt would like to 
treat assessors and the whole topic of assessment, in an emotional and
confrontational manner.  In short, let's remember that we're in HOME_WORK, not
in SOAPBOX.  Thank you.

					DCL, moderator

    While I'm in NJ, not Mass - thought you'all might get a laugh out
    of the letter I got from my town today:
    
    We are increasing your assessed value because of the improvement
    you have made- a deck.
    
    The joke is - I filed a permit for a deck, but have NOT built it
    yet!  Will send a reply letter next week.
    
    	-Barry-
    

    Well, since this has been no activity here for awhile and there's no
    "official" bank note, I'll stick this here.

     Has anyone heard of a bank or savings bank or credit union or credit
and loan company called NUMERICA?  That may not be the exact spelling.
It's very important that my brother-in-law find out where this place is and
a phone number.  He wants to buy a new car and when the company did a
credit check, they had a problem with a loan he cosigned for 2 years ago
for his father at Numerica.  Funny thing is, he hasn't seen his father in 
about 15 years!!  So he wants to contact them ASAP!!

     Chris D.                                  

    re: .-1 
    
    Numerica is a savings bank chain in the New Hampshire area.  The number
    for the Nashua office is: (603) 882-1008.  The folks there sould be
    able to direct you to the correct branch.
    
    Dan

    Thanks.  I'll call my brother-in-law right now.
    
    Chris D.
    

    Incorrect credit reports are VERY common.  Probably what happened is
    that someone with a similar-sounding name or a similar social security
    number did co-sign such a loan.  That is, he shouldn't hit the ceiling
    quite yet - it's much more likely to be a simple mistake than some kind
    of a fraud (although that did happen to someone I know - someone else
    had obtained a social security card in my friend's name, and used that
    to "kite" several bad loans, got a driver's license, etc. - since the
    crook looked pretty much like my friend (same body build, hair and eye
    color), it took her several months to straighten this all out and land
    the crook in jail - but this is VERY UNCOMMON).

I'm glad you found what you were looking for, but credit checks on banks 
relative to car loans have NOTHING to do with DIY home_work.  Your question, 
the replies, and this notice will be deleted next week.

Paul
[Moderator]

    re: .10  O.K.  I figured people who own homes, know banks.
    
    re: .9  It just so happens that someone with a similar name or ss
    number cosigned on his father's loan?  That would be quite a
    coincidence.
    
    Chris D.

>    re: .10  O.K.  I figured people who own homes, know banks.

Quite possibly true.  But people who own homes also know cars, computers, 
restaurants, Fish&game clubs, good day hikes in the White mountains, tropical 
fish raising hints..............................................

Where do you stop that?

Given that we have nearly 4000 legitimate notes related to home repair and 
maintenance, I think we'd better not step out to include every other topic in 
the world.

Paul

BTW, Paul, why does this entire topic exist?  Is it because it was created
before you created order out of chaos?

> BTW, Paul, why does this entire topic exist?  Is it because it was created
> before you created order out of chaos?

Well, the original note refers to locking in rates on home mortgages.  Perhaps 
that might be more appropriate to REAL_ESTATE, but we've traditionally allowed 
notes about financing houses here - it even has its own keyword.

Questions on credit references found while getting a car loan just seemed to me 
to be stepping over the line.

Paul

Reply .1 contains a BASIC program that's been floating around Digital for
years.  It lets you play with your mortage numbers to answer questions like
"If I pay so much more a month, how much sooner will my mortgage be paid off?"

What you have to do:

1) extract the next reply to a file called LOAN.BAS
2) run BASIC (typing "MC BASIC" seems to work on VAX/VMS)
3) type "RUN LOAN" to load and run the program
4) the screen will look like this

	$ mc basic

	VAX BASIC V3.3

	Ready

	run loan
	LOAN     5-MAR-1991 13:21

	MORTGAGE COMPARISON PROGRAM

	WITH THIS YOU CAN PRINT A LOAN AMORTIZATION SCHEDULE OR
	 YOU CAN COMPARE DIFFERENT FACTORS IN THE LOAN.

	ENTER (L) FOR LOAN AMORTIZATION OR
	ENTER THE ITEM TO VARY
	AMOUNT(A), INT RATE(I), OR YEARS(Y)
	?

5) type one of the letters L, A, I, or Y, then answer any further questions. 
   For example, to run the Loan amortization, type "L"


	          AMORTIZATION SCHEDULE

	PRINICIPAL=$ 128000  INTEREST= 9.875 %
	MONTHLY PAYMENT=$ 1111.49

	             MO PAYMT    BALANCE     PRINCIP      INT.     CUM.INT
	             --------    -------     -------      ----     -------
	 1            1111.49    127942        58.16     1053.33   1053.33
	 2            1111.49    127883        58.64     1052.85   2106.18
	 ...
	 359          1111.49    1114.46     1093.32       18.17   272137
	 360          1111.49      12.14     1102.32        9.17   272146
 	 361            12.24       0          12.14         .1    272146

	TOTAL INTEREST 272146
	Ready
 
6) Note that you'll have to type "RUN" after each thing you do to restart the
   program (it's already loaded after the first time).  Varying the mortage
   amount looks like this

	? a
	ENTER THE BEGINNING AMOUNT, ENDING AMOUNT TO CONSIDER
	? 123000,132000
	ENTER THE INTERVAL BETWEEN PRINTS I.E.,  1000
	? 1000
	ENTER THE INTEREST RATE
	? 9.875
	ENTER THE YEARS OF THE MORTGAGE
	? 30

	 TERM          INTEREST       MORTGAGE       MONTHLY PI      TOTAL
	(YEARS)          RATE          AMOUNT         PAYMENT       INTEREST
	________       ________       ________       __________     __________
	
	 30             9.875          123000         1068.07        261505
	 30             9.875          124000         1076.75        263631
	 30             9.875          125000         1085.44        265757
	 30             9.875          126000         1094.12        267883
	 30             9.875          127000         1102.8         270009
	 30             9.875          128000         1111.49        272135
	 30             9.875          129000         1120.17        274261
	 30             9.875          130000         1128.85        276387
	 30             9.875          131000         1137.54        278514
	 30             9.875          132000         1146.22        280640

	Ready


7) varying the interest rate (I) and the term in years (Y) work similarly.

8) when you're all done, type "EXIT" to get out of BASIC

Enjoy.  I can't recall the author of this program, if ever I knew who he/she
was.  I've got a version of this that makes a graph on a ReGIS terminal, but I
haven't got one handy to check it out.

-- Kenny House

100 PRINT"MORTGAGE COMPARISON PROGRAM "
110 PRINT
120 PRINT"WITH THIS YOU CAN PRINT A LOAN AMORTIZATION SCHEDULE OR"
130 PRINT" YOU CAN COMPARE DIFFERENT FACTORS IN THE LOAN."
140 PRINT
150 rem NOTE* ROUNDING ERRORS MAY OCCUR IN COMPUTED NUMBERS
160 rem
170 PRINT"ENTER (L) FOR LOAN AMORTIZATION OR"
180 PRINT "ENTER THE ITEM TO VARY"
190 PRINT"AMOUNT(A), INT RATE(I), OR YEARS(Y)"
200 S1=1
210 S2=1
220 S3=1
230 INPUT A$
240 IF A$="L" THEN  1300
250 IF A$="l" THEN  1300
260 rem
270 rem	*** ENTRY OF VARIABLE ITEMS ***
280 if a$="a" then 310
290 if a$="A" then 310
300 goto 370
310 PRINT "ENTER THE BEGINNING AMOUNT, ENDING AMOUNT TO CONSIDER"
320 INPUT A0,A1
330 PRINT "ENTER THE INTERVAL BETWEEN PRINTS I.E.,  1000"
340 INPUT S1
350 GOTO 620
360 rem
370 if a$="i" then 400
380 if a$="I" then 400
390 goto 470
400 PRINT "ENTER THE LOWEST, HIGHEST INTEREST RATE TO CONSIDER"
410 INPUT R0,R1
420 PRINT "ENTER THE INTERVAL BETWEEN PRINTS I.E., .25 FOR 1/4"
430 INPUT S2
440 GOTO 550
450 goto 540
460 rem
470 if a$="y" then 490
480 if a$="Y" then 490
490 PRINT "ENTER THE LOWEST, HIGHEST NUMBER OF YEARS TO CONSIDER"
500 INPUT Y0,Y1
510 PRINT "ENTER THE INTERVAL BETWEEN PRINTS I.E., 5"
520 INPUT S3
530 rem
540 rem	*** ENTRY OF CONSTANT ITEMS ***
550 PRINT "ENTER THE MORTGAGE AMOUNT"
560 INPUT P
570 A0=P
580 A1=A0
590 rem
600 IF A$="I" THEN 710
610 IF A$="i" THEN 710
620 PRINT "ENTER THE INTEREST RATE"
630 INPUT I1
640 IF I1>1 THEN 660
650 I1=I1*100
660 R0=I1
670 R1=R0
680 rem
690 IF A$="Y" THEN 750
700 IF A$="y" THEN 750
710 PRINT "ENTER THE YEARS OF THE MORTGAGE"
720 INPUT Y
730 Y0=Y
740 Y1=Y0
750 PRINT
760 rem
770 PRINT
780 rem	*** PROCESSING LOOP ***
790 PRINT
800 PRINT " TERM";TAB(15);"INTEREST";TAB(30);"MORTGAGE";TAB(45);"MONTHLY PI";TAB(60);" TOTAL"
810 PRINT "(YEARS)";TAB(15);"  RATE";TAB(30);" AMOUNT";TAB(45);" PAYMENT";TAB(60);"INTEREST"
820 PRINT "________";TAB(15);"________";TAB(30);"________";TAB(45);"__________";TAB(60);"__________"
830 PRINT
840 FOR Y=Y0 TO Y1 STEP S3
850 FOR I1=R0 TO R1 STEP S2
860 FOR P=A0 TO A1 STEP S1
870 rem
880 rem	*** COMPUTATION AND PRINT ***
890 I=(I1/100)/12
900 M=I/((1+I)^(Y*12)-1)+I
910 M1=M*P
920 I3=M1*Y*12-P
930 PRINT Y;TAB(15);I1;TAB(30);P;TAB(45);M1;TAB(60);I3
940 NEXT P
950 NEXT I1
960 NEXT Y
970 rem		*** PROGRAM TERMINATION ***
980 PRINT
990 goto 1940
1000 PRINT
1010 rem  ********************************************************
1020 rem  *                                                      *
1030 rem  *  NAME    :  DESCRIPTION				*
1040 rem  ********************************************************
1050 rem  *                                                      *
1060 rem  *  S1	:  INTERVAL BETWEEN MORTGAGE AMOUNTS		*
1070 rem  *  S2	:  INTERVAL BETWEEN INTEREST RATES		*
1080 rem *   S3	:  INTERVAL BETWEEN MORTGAGE YEARS		*
1090 rem *   A0	:  FIRST AMOUNT CONSIDERED			*
1100 rem *   A1	:  LAST AMOUNT CONSIDERED			*
1110 rem *   R0	:  LOWEST RATE CONSIDERED			*
1120 rem *   R1	:  HIGHEST RATE CONSIDERED			*
1130 rem *   Y0	:  LOWEST NUMBER OF YEARS CONSIDERED		*
1140 rem *   Y1	:  HIGHEST NUMBER OF YEARS CONSIDERED		*
1150 rem *   P	:  SINGLE MORTGAGE AMOUNT			*
1160 rem *  I1	:  SINGLE INTEREST RATE				*
1170 rem *  Y	:  SINGLE YEAR TO CONSIDER			*
1180 rem *  M1	:  MONTHLY PAYMENT COMPUTED			*
1190 rem *  I3	:  TOTAL INTEREST PAID				*
1200 rem
1210 rem ********************************************************
1220 rem *							*
1230 rem *	NAME	:  DESCRIPTION				*
1240 rem ********************************************************
1250 rem *							*
1260 rem *	TAB	:  FORMATS PRINT LINES			*
1270 rem ********************************************************
1280 rem
1290 goto 1940
1300 PRINT "AMORTIZATION SCHEDULE"
1310 PRINT
1320 PRINT"THIS PROGRAM CALCULATES A MONTHLY LOAN PAYMENT"
1330 PRINT "SCHEDULE. IT DISPLAYS THE PAYMENT,BALANCE,PRINCIPAL,"
1340 PRINT "INTEREST, AND CUM.INTEREST FOR EACH MONTH OF THE LOAN"
1350 PRINT
1360 INPUT"ENTER THE PRINCIPAL (AMOUNT OF THE LOAN)";A
1370 INPUT"ENTER THE YEARLY INTEREST RATE(%)";I
1380 INPUT"ENTER THE MONTHLY PAYMENT";P
1390 rem
1400 L=1
1410 GOSUB 1900
1420 B=A
1430 REM PRINT SCHEDULE
1440 PRINT TAB (10);"AMORTIZATION SCHEDULE"
1450 PRINT
1460 PRINT "PRINICIPAL=$";B;" INTEREST=";I;"%"
1470 PRINT "MONTHLY PAYMENT=$";P
1480 PRINT
1490 PRINT"             MO PAYMT    BALANCE     PRINCIP      INT.     CUM.INT"
1500 PRINT"             --------    -------     -------      ----     -------"
1510 Y=1
1520 R=0


1530 IF A<=P THEN 1810
1540 GOSUB 1660
1550 PRINT Y;TAB(15);P;TAB(27);P2;TAB(39);P0;TAB(49);I2;TAB(59);R
1560 GOSUB 1630
1570 Y=Y+1
1580 IF P2=0 THEN 1600
1590 GOTO 1530
1600 PRINT
1610 PRINT"TOTAL INTEREST";R
1620 goto 1940
1630 FOR T=1 TO 1125
1640 NEXT T
1650 RETURN
1660 REM CALCULATE BALANCE AND INTEREST
1670 I2=A*(I/100)
1680 I2=I2/12
1690 GOSUB 1760
1700 P2=A-(P-I2)
1710 P0=P-I2
1720 P2=INT(P2*100+.5)/100
1730 A=P2
1740 R=I2+R
1750 RETURN
1760 REM ROUND OFF TWO DECIMAL POINTS
1770 I3=I2*100
1780 I4=INT(I3+.5)
1790 I2=I4/100
1800 RETURN
1810 REM CALCULATE LAST PAYMENT
1820 I2=P2*(I/100)
1830 I2=I2/12
1840 GOSUB 1760
1850 P0=P2
1860 P=P2+I2
1870 P2=0
1880 R=I2+R
1890 GOTO 1550
1900 FOR HU=1 TO 24
1910 PRINT
1920 NEXT HU
1930 RETURN
1940 end

Make sure you compile this with the /DOUBLE switch (or whatever it is
for BASIC), otherwise there will be so few significant digits in the
calculations that it will be worthless.  Indeed, most amortization programs
I have seen around play fast-and-loose with accuracy, and this can add
up over a long-term loan.

I ended up writing my own FORTRAN program to do amortization because I wasn't
satisfied with any of the others I had seen.  Mine takes care to do all
arithmetic using integer values to avoid binay-decimal conversion errors.
But this level of concern is not necessary when just doing "what-if"
calculations.

				Steve

	I know that most "Real Computer" people have a religious aversion
to anything having to do with PCs, but...

	Any spreadsheet program will do this as well or better with a lot
less effort.

	If you want to do it on a VAX, use DECalc. If you want it to be
easy, use a PC spreadsheet like Multiplan or Lotus. Any modern spreadsheet
will have built-in functions for calculating payment amounts.

ET

>If you want to do it on a VAX, use DECalc.

  ... and if you're on a DECwindows workstation, you might enjoy the
  snazzy graphics of DECdecision's spreadsheet, complete with integrated
  graph/chart generation. Don't know for sure, but there might actually
  be a mtge spreadsheet mentioned somewhere in the VIA::DECDECISION
  notesfile.

    Steve,
    
    Would you care to share your program? Either post it or a pointer or
    send me mail. I'd appreciate seeing what it does. Thanks.
    
    	BD�

! Amortization program
!
! Author: Steve Lionel
!
	IMPLICIT NONE
	REAL*8 RATE,RATE_PER_PAYMENT
	INTEGER NUMBER_OF_PAYMENTS
	REAL*8 REMAINING_PRINCIPAL
	REAL*8 MONTHLY_PAYMENT,SCHEDULED_PAYMENT
	REAL*8 MONTHLY_PRINCIPAL
	REAL*8 MONTHLY_INTEREST
	REAL*8 PRINCIPAL_FACTOR
	REAL*8 YTD_PRINCIPAL,YTD_INTEREST
	REAL*8 TOTAL_INTEREST
	INTEGER YEAR_NUMBER, MONTH_NUMBER, DAY_NUMBER, PAYMENT_NUMBER
	INTEGER YEARS
	LOGICAL*4 DONE /.FALSE./
	CHARACTER*3 MONTHS(12) /'Jan','Feb','Mar','Apr','May','Jun',
	1  'Jul','Aug','Sep','Oct','Nov','Dec'/
	CHARACTER*80 FILESPEC

	WRITE (6,11) ' Enter interest rate in percent: '
11	FORMAT ($,A)
	READ (5,12,END=999) RATE
12	FORMAT (BN,2PG10.0)
	RATE_PER_PAYMENT = RATE/12.0D0
	WRITE (6,11) ' Enter number of years: '
	READ (5,13,END=999) YEARS
13	FORMAT (BN,I10)
	NUMBER_OF_PAYMENTS = YEARS * 12
	WRITE (6,11) ' Enter principal amount: '
	READ (5,14,END=999) REMAINING_PRINCIPAL
14	FORMAT (BN,-2PG12.0)
	WRITE (6,11) ' Enter loan year number (1991, etc.): '
	READ (5,13,END=999) YEAR_NUMBER
	WRITE (6,11) ' Enter loan month number (1-12): '
	READ (5,13,END=999) MONTH_NUMBER
	WRITE (6,11) ' Enter loan day number (1-31): '
	READ (5,13,END=999) DAY_NUMBER
	WRITE (6,11) ' Enter file specification for report: '
	READ (5,15) FILESPEC
15	FORMAT (A)
	OPEN (UNIT=1,FILE=FILESPEC,STATUS='NEW',FORM='FORMATTED',
	1  CARRIAGECONTROL='LIST')

	PRINCIPAL_FACTOR = 1.0D0 - ((RATE_PER_PAYMENT+1.0D0)**
	1  (-NUMBER_OF_PAYMENTS))
	PRINCIPAL_FACTOR = RATE_PER_PAYMENT / PRINCIPAL_FACTOR

	SCHEDULED_PAYMENT = DNINT(REMAINING_PRINCIPAL * PRINCIPAL_FACTOR)
	TOTAL_INTEREST = (NUMBER_OF_PAYMENTS * SCHEDULED_PAYMENT) -
	1  REMAINING_PRINCIPAL

101	FORMAT ( ' Principal amount = $',-2PF9.2)
102	FORMAT ( ' Interest rate    =  ',2PF9.2,'%')
103     FORMAT ( ' Duration of loan =  ',I9,' months')
104	FORMAT (/' Monthly payment  = $',-2PF9.2)
105	FORMAT ( ' Total interest   = $',-2PF9.2)

	WRITE (1,101) REMAINING_PRINCIPAL
	WRITE (1,102) RATE
	WRITE (1,103) NUMBER_OF_PAYMENTS
	WRITE (1,104) SCHEDULED_PAYMENT
	WRITE (1,105) TOTAL_INTEREST
	
106	FORMAT (///,T30,'Calendar year ',I4//
	1      '     Payment',T25,'Remaining',T37,'Principal',T48,
	2        'Interest',T61,'Total'/
	3      '   #     Date',  T25,'Principal',T39,'Payment', T49,
	4        'Payment', T59,'Payment'/
	5      1X,3('-------------------------'))
107	FORMAT (1X,I3,1X I2,'-',A3,'-',I4,2X,-2PF15.2,2X,3(-2PF10.2))
109	FORMAT (//' Year-to-date interest paid    = $',-2PF9.2/
	1         ' Year-to-date principal paid   = $',-2PF9.2/
	2         ' End-of-year principal balance = $',-2PF9.2)

	DO WHILE (PAYMENT_NUMBER .LT. NUMBER_OF_PAYMENTS)
	    IF (MONTH_NUMBER .LT. 12) WRITE (1,106) YEAR_NUMBER

	    YTD_INTEREST = 0
	    YTD_PRINCIPAL = 0
	    DO WHILE ((MONTH_NUMBER .LT. 12) .AND. .NOT. DONE)
		PAYMENT_NUMBER = PAYMENT_NUMBER + 1
		MONTH_NUMBER = MONTH_NUMBER + 1
		MONTHLY_INTEREST = 
	1         DNINT(REMAINING_PRINCIPAL * RATE_PER_PAYMENT)
		MONTHLY_PRINCIPAL = SCHEDULED_PAYMENT - MONTHLY_INTEREST
		IF (PAYMENT_NUMBER .EQ. NUMBER_OF_PAYMENTS) THEN
		  MONTHLY_PRINCIPAL = REMAINING_PRINCIPAL
		  DONE = .TRUE.
		  END IF
		MONTHLY_PAYMENT = MONTHLY_INTEREST + MONTHLY_PRINCIPAL
		WRITE (1,107) PAYMENT_NUMBER, DAY_NUMBER,
	1	  MONTHS(MONTH_NUMBER),YEAR_NUMBER,
	2	  REMAINING_PRINCIPAL, MONTHLY_PRINCIPAL,
	3	  MONTHLY_INTEREST, MONTHLY_PAYMENT
		REMAINING_PRINCIPAL = REMAINING_PRINCIPAL - MONTHLY_PRINCIPAL
		YTD_INTEREST = YTD_INTEREST + MONTHLY_INTEREST
		YTD_PRINCIPAL = YTD_PRINCIPAL + MONTHLY_PRINCIPAL
		END DO

	    IF (PAYMENT_NUMBER .GT. 0) WRITE (1,109) YTD_INTEREST,
	1    YTD_PRINCIPAL, REMAINING_PRINCIPAL
	    YEAR_NUMBER = YEAR_NUMBER + 1
	    MONTH_NUMBER = 0
	    END DO
999	END

    Can we please take all this over to REAL_ESTATE?  I realize we have a
    financing keyword but I am not sure why.  
    
    

    Is there a time limit that the Assessors must get back to you with
    their decision regarding an abatement request?  I filed my request
    on 12/14/90 and have not heard from them as of 3/6/91.

    RE: .32:  Obviously, the legal timeframe for a response from the
    Assessors depends on the State, and in some cases, the County,
    depending on how your State is structured.
    
    In Massachusetts, the legal statutes are contained in Chapter 59,
    of the Mass General Laws.  The back of your tax bill gives you
    specific instructions on your right to file for an abatement: 
    
    	"You have the right to contest your assesment.  To do so, you
    must file an application for an abatement in writing on an approved
    form with the Board of Assessors.  You may apply for an abatement if
    you believe your property is valued at more than its fair cash value,
    is not assessed fairly in comparison with other properties, or is not
    properly classified.  The deadline for filing for an abatement 
    application is 30 days after the date tax bills were mailed".
                                                                	
    "Applications are considered filed when received by the assessors.  If
    your application is not received by the applicable deadline, the
    assessors cannot by law grant an abatement or exemption".
    
    I have filed for an abatement in the past, and received a written
    notice of decision 15 days later.  On the decision was a notice that
    the assessors were required to notify me within 10 days of their 
    decision, but I can't find any reference to the time they are allowed
    to make that decision.
    
    Assuming that you filed all the correct paperwork within the required
    timeframe, I would say that 80 to 90 days is a very long time to wait
    for a decision.
                                                                
     If your Board of Assessors can't give you an answer, go to the local 
    Library or office of the Selectmen and browse through the General Laws 
    yourself.
    
    Frank
    
    While 

(No luck with 1111.47 or 457.*...)

Summer cottage in Maine, 12x25' overall. On posts - no foundation.

Everything is fine but the financing, which is unattractive variable-rate
portfolio-based with a local bank.

The mortgage man says to refinance, winterizing the place would make for
a much more attractive rate and terms. The seasonal lending market is limited
and not competetive, apparently. I'm considering whether a quick&dirty
"winterization" is appropriate for financing purposes (There are some good
deals on fixed rate mortgages these days).

The roof & walls are fully insulated, since we knew for sure we didn't want
to take all the walls apart later, and insulation for a 300sf "House" isn't
that expensive.

The only thing in the way of a decent money-saving re-finance is "Central
Heating", and presumably, winterization of the now-seasonal supply plumbing.

I have absolutely no desire to attain winterization for the sake of using
the house in the winter, but I also don't want to make a mess.

Can anyone offer advice on what "winterized" means to a bank appraiser? I'm
thinking a couple of baseboard electric registers and elecric "heat tape" on
the supply plumbing ought to be doable for $200 and a weekend's work. If
that's really true, it could save a lot more than that in financing costs
over time.

The floor joists are about 8" above the ground, and there is no insulation
in the floor per se. Is that going to be a problem? Again, the point isn't
to accomplish efficient heating, but rather, to make the bank happy.

Any comments/ideas/suggestions welcome...

Erik

    Suggested program plan:
    
    (1)  Call bank of your choice.
    (2)  Ask them.
    
    They would probably be happy to know that the prospective mortgagee
    will modify the property in accordance with their requirements.
    
    PBM

Two days ago I got a letter from my mortgage company. They give my the option
of converting the payment scheme of my mortgage. Instead of monthly payments
I would make biweekly payments. These biweekly payments would be 1/2 of my 
current monthly payments.

To me the benefit would be that my mortgage would be paid back in 13 years 
instead of 15 years, with a *very substantial* savings in interest.

In order to do this conversion, they would charge no points or lawyer's fees.
They would, however, require a processing fee of "only" $349.

It took me a while to figure out how it was possible to shave two years off
my mortgage by paying biweekly instead of monthly. Finally I realized it is
nothing more than an accelerated payment scheme. Converted back to monthly
payments, biweekly payments mean making *13* payments/year instead of 12!

Just for the heck of it, I calculated when my mortgage would be paid off if
at the end of each year I would make a double monthly payment. (This 
calculation is easily done with a spreadsheet.) Well, in that case my
mortgage would be paid off after ... 13 years! So *no* difference!

To be perfectly honest, in my scheme the final payment would be a couple of
hunderd dollar more than in the biweekly scheme. *But*... in my scheme that
is a couple of hunderd dollars *in 13 years*, in their scheme it is $349
processing fee *now*!

So it's *not* a good deal, and I won't go for it... Or did I overlook somthing?

/Date

    No, I don't believe you overlooked anything.  As long as your
    mortagage agreement lets you pay extra on the principal, I
    see absolutely no advantage to signing up for anything else.
    You can achieve the same results (or better) by paying extra
    on the principal each month.
    
    In fact, I think the best thing to do is to sign up for the
    longest possible term mortgage (30 years, or whatever) with
    no prepayment penalty, then pay it off as fast as you can by
    paying extra on the principal.  That way, if you get in a
    financial bind you don't *have* to pay anything extra, but if 
    you are financially able you can pay it off in a hurry and save
    gobs of interest payments.

    
    Was the deal biweekly or bimonthly? I'm paying my mortgage twice a
    month. Twice a month will yield a big interest savings and reduce your
    paying years without increasing what you pay per year.
                                                                   Bill

    THere's where the real savings are at.  You overlooked the interest
    savings by having Half of the payment done mid month.  That is, for the 
    sake of discussion currently the interst rates are based on you paying 
    400 a month.
    
    By going bi weekly you would pay interest rates based on 400 the
    begaining of the month and 200 mid month. 
    
    That could add up to a substantial savings.
    
    Skip

    
    Savings on a $100,000 loan for 15 years paid twice a month would be
    around 20-30K depending on the interest rate of 8-10%. The mortgage 
    would be paid off in about 11.5 years instead of 15 years. The same
    holds true if you pay every two weeks but the savings aren't as great.
    Either way... a good deal.

This has been discussed to death in REAL_ESTATE.

Re .2

With "biweekly" I mean: "every two weeks". That is *NOT* the same as 
"twice per month"!!

According to my calculations is does *not* make much difference whether you
pay once or twice per month. It *does* make a difference when you pay every
two weeks. But in the latter case you are paying more per year.

Re .5

Thanks for pointing me to that conference.

/Date

    
    Re .6.  Paying twice a month or every two weeks is indeed different.
    
    Either way there are significant savings in interest payed over the
    term of the mortgage. If you see little difference, you are calculating
    something wrong.                                                  
                                                 

re .-1:

Not according to the handy dandy mortgage program I picked up somewhere.
(How's that for a recommedation!).  If you borrow 100K at 9% for 30 years,
with 12 payments a year you pay $804.62 a month, and with 24 payments a
year you pay $402.16 twice a month.  Your total savings are a whopping
$105 over the term of the loan ($189,559 vs. $189,664 in interest).

    Paying every 2 weeks is a total of 26 payments or 13 months worth
    of payments.  It's the "extra" one month payment applied directly
    to your principal that brings down the length of the loan.  Paying
    twice a month is only 24 payments or 12 months worth which won't
    make much difference than what you do now.
    
    You can wait until the end of the year and send one extra months
    payment and achieve the same results.  You certainly don't need
    to pay $349 bucks to do this.  Check you monthly bill, I'm sure it
    has a line for:  Extra amount paid ___________

    
    Re -1.
            That is true if the principle is applied monthly even if you
    are paying every two weeks or twice a month. If the principle is
    applied as you pay, and interest is calculated every two weeks or twice
    a month, there are BIG interest savings to the tune of 20-30K depending
    on the interest rate and # years. Check your bank to see which is true.

    My calculations show a different but decidedly equally unimpressive
    savings as ::SACKS.
    
    The following formula was used on Lotus...
    
    prin: 100000
    rate: .09
    term  360
    
    payment = 804.62
    
    Amotization was calculated by multiplying the outstanding balance by
    the rate/payments per year. This resulting monthly interest amount was deducted from
    the monthly payment, with the balance applied to the outstanding
    principle. This became the balance for the next iteration.
    
    One payment per month resulted in a gross interest charge of
    189,664.14.
    
    Using the same monthly payment divided by 2, with interest
    recalculated over 720 equal payments yielded a gross interest
    charge of 189,124.23.
    
    Edd

    Cross reference to REAL_ESTATE
    
       8  NATASH::HYATT         3-DEC-1986     9  New Bi-monthly mortages
    1010   MAMIE::GIESTING     14-JUN-1988    10  SOURCES FOR BIWEEKLY MORTGAGES
    
    [note that bi-weekly & bi-monthly are used interchangeable to mean
     either 24 or 26 payments per year]
    
    -al (REAL_ESTATE moderator)

Re .10

That is what the banks are *claiming*! However, the banks compare the "normal"
monthly schedule with the "every-other-week" schedule. The latter is an
ACCELERATED payment schedule since this is equivalent to *13* monthly
payments per year!

Let's take an example. 

Suppose I take out a mortgage of $100,000.-- over 15 years at 8.875%. 
In a monthly payment scheme, I would have to pay the bank $1006.84/month.
After 180 payments the debt is retired (because of rounding to the nearest
whole cent, the last payment is $1014.24).

If I were to pay twice-per-month (one payment of $503.42 on the 15th, and
another of $503.42 at the end of the month), the debt would be retired after
360 payments. However, the last payment would be $173.60 instead of $503.42.

So the last payment of both the monthly and the "twice-per-month" scheme are
on the same date. Therefore, the $ difference can be compared directly.
So the advantage of the "twice-per-month" over the monthly scheme is
$1014.24 - 503.42 - 173.60 = $337.22.

This is not really impressive, but the real difference is even smaller. I will
explain why. In the "twice-per-month" scheme I would pay $503.42 to the bank
on the 15th. In the monthly scheme I keep that money to the end of the
month, and *then* pay $1006.84. So in the monthly scheme I can earn 
interest on the $503.42.

Let's say the interest rate on a savings account is 5%. Then in 15 days 
$503.42 would earn $1.05 interest. In the second month the total of 
$503.42 + $1.05 would earn 5% interest, etc.. After 359 payment periods the
interest earned has compounded to $227.25.

So the *net* difference between a monthly and a "twice-per-month" scheme is
$337.22 - $227.25 = $109.97. However, that is in *15* years! At 5%, the
current value of %109.97 is $52.90.

These $52.90 has to cover the 180 postage stamps for the extra payments I
would make in a "twice-per-month" scheme. Assuming the postage goes up 
5%/year, the cost (current $) would be: 180*$0.29 = $52.20.

So after postage the *net* saving of the "twice-per-month" over the monthly
scheme is: $52.90 - $52.20 = $0.70!!!!!

Are *you* going to mail 180 extra checks over 15 years for the savings of
$0.70?? Well, I'am not!!

Now the "every-other-week" scheme.

In an "every-other-week" scheme (26 payments/year), the debt would be retired
after 333 payments (12 years 42 weeks). The last payment would be $302.29.

Remember that the "every-other-week" scheme is equivalent to 13 monthly
payments per year. In my monthly scheme, I have the option of making extra
payments to accelerate repayment of the mortgage. In order to compare the
"every-other-week" scheme to the monthly scheme, I have to make an extra
monthly payment each year.

If I were to make that extra payment after 6 months (so at the 6th, 18th,
30th, etc payment), the debt would be retired after 154 payments. That is
equivalent to 12 years 10 months. The last payment would be $561.26.

So with the extra monthly payment per year, in both the "every-other-week"
scheme and the monthly scheme the loan is retired at approximately the same
date (difference less than a week). So the $ difference can be directly
compared again. This difference is $561.26 - $302.29 = $258.97 (in 12 years
10 months).

At 5%, the current value of that amount is $103.08. From this amount, the
postage for the extra payments in the "twice-per-week" scheme must be 
subtracted: (333 - 154)* $0.29 = 51.91. So the final result is:
$103.08 - $51.91 = $51.17.

Still not an impressive savings, eh?

In my case the bank offers to do electronic transfers. This saves postage,
but on the other hand they want to cash $349.-- for changing the scheme.
Then changing the scheme *costs* money!!

The $20K-$30K savings the banks claim are the result of comparing apples
and oranges (i.e. a standard vs accelerated scheme).

I suspect that in my case the bank is interested in the $349.-- as well
as the convenience of electronic transfers. There's nothing in it for *me*.
*I* would pay the bank for *their* convenience!!

If the bank would offer to *pay* me $349.-- for changing the scheme and
the electronic transfers, I would consider it a fair deal. 

/Date

    .9
    Making a lump sum payment at the end of the year on a twice a month 
    schedule is not the same as a bi-weekly payment. The interest is less 
    than a monthly schedule but more than bi-biweekly. This would be true if
    on the bi-weekly the interest is actually calculated every two
    weeks.
    

For the bank to charge you anything at all to switch to a biweekly (which is
semi-monthly; anyone who calls this bimonthly is incorrect) is ridiculous.   
I've also seen banks charge a higher interest rate for biweeklies.  It's to
the bank's advantage to have you pay more often, so they should pay you!

Yes, the savings to you by making the equivalent of 13 monthly payments per
year instead of 12 is significant.  It does cost a bit more per year, but
you pay off the loan MUCH faster.

However, as others point out, it is simple enough to just make extra principal
payments when you can; this has the same effect and doesn't tie you to the
more rigorous schedule in case you fall on harder times.

				Steve

    Congratulations folks, you all succeeded in completly confusing me. 
    Why not simply go to the bank and ask them "What is the total ammount I
    will have payed, if I switch to bi-weekly."  
    
    Then post the answer and see if it's a good deal or not.
    
    Skip

Re .16

Skip, that is *exactly* what the banks are hoping for (I don't even have to
*go* to the bank to get the numbers; the numbers were in the paperwork they
sent me). They are trying to take advantage of gullible people.

According to the bank's numbers I would indeed pay significantly more than 
$10K less in the biweekly scheme. However, the reason for that is *not* that
I would be on a biweekly scheme, but because I would pay back the loan
faster (i.e. pay more money/year)!

That is something I can do in *any* scheme (as long as the mortgage note
allows extra payments towards the principal). That's why I don't get value
for my $349.--.

I'm sure the mathematics behind these calculations are beyond 95% of the
U.S. population. My bank tries to take advantage of that: cashing $349.--
and getting people into a convenient (for the bank!) electronic payment
scheme in the process. Clever, very clever.

My bank isn't lying, but my bank isn't telling the truth either.

/Date

    Okay, I THINK I understand it now.  
    
    
    However I think I'll go over to the other confrences mentioned earlier
    to scan through and see if I'm getting right or not.  
    
    So what would they do if you just went ahead and started paying it bi
    weekly instead of monthly?
    
    
    SKip

    RE: -1 
    
    (finaly one _I_ can answer)
    
    I asked my mortgage co. if I could just pay every other week, and I
    meant 1 payment ahead of schedule, and they said they, as well as many
    others, just don't/won't accept partial payments.
    
    They will however accept extra with the regular payment once a month.  
    Kinda funny too because you have to specify if you want the extra to go 
    towards principal or escrow.  Ya right, I don't want to pay the damn 
    escrow to them as it is, let alone _extra_ towards it.  Just let ME pay 
    my own taxes, I can handle it.
    
    Question:  I read all the previous replies, and have in the past spent
    HOURS in the real_estate notes file, but...
    
    What if I save a 1/12th of a full payment each month in a savings
    account and took the full amount out at the end of the year as extra to
    pay towards the principal.  Would this eventually equal if I just pay
    the 1/12 of a payment each month directly to the mortgage co.?
    
    I _think_ the answer is to pay the 1/12th extra each month as the
    morgage carries a 10.5% rate I have to pay _them_ while the savings
    account will only earn around 5-6% for me.
    
    Right?  Thanks,        
            Steve

    This reminds me of the guy I knew who had a 6% mortgage in '78 (from
    the early '60s and, no, it wasn't on a log cabin).  Anyway, rates were
    going stratospheric and he got a letter from his bank that said, "Your
    mortgage is not keeping pace with the times ... please come down and
    renegotiate, use the equity, blah, blah."  As a true New Hampshireman
    he sat tight and laughed all the way to the bank every month.
    
    Right now my principal contribution on my mortgage is about $45/mo and
    I'm rounding my payment up to $1000 which means making an additional $54
    payment each month on principal.  I know, deep down, that this has the
    effect of shortening my mortgage term by a little more than 1 month for
    each month that I make the payment.  Some day I'll sit down and figure
    out the total amount I've saved.  Of course, it is a bit silly to pay
    off a mortgage early if paying other loans at higher interest rates.
    But that's the American Way, isn't it?
    
    ed

Re .19

You're exactly right. If you can't get a better rate for your savings than
your mortgage rate, you're better off paying the 1/12 monthly payment extra.

If you could get the same rate for your savings as your mortgage rate, you 
might still be better off paying the 1/12. That is because of state income tax.
Interest paid on mortgage may not be deductable, but interest earned may be 
taxable. This differs per state. 

Questions around mortgages can be very complicated, and I think many people
make wrong decisions because they do not understand the issues. 

RE: .20
    
>> out the total amount I've saved.  Of course, it is a bit silly to pay
>> off a mortgage early if paying other loans at higher interest rates.
>> But that's the American Way, isn't it?
>>    
>> ed
    
    Silly?  Actually I think it's more like a bit of self control
    awareness.  If I pay extra towards my mortgage I will have a shorter
    mortgage.  If I pay that extra amount to my 18+% Master Card balance
    I will just end up with the avalability to spend it again (which I
    will).
    
    Can't spend the equity on your home (without a home equity loan anyways)
    once you've paid it.
    
    RE: .21
    
    Thanks,
    Steve

re .22:

A beter form of self-control is to call the credit card company and tell
them to lower your credit limit to $500, or $250 or whatever it takes
to keep your credit card spending within the bounds of your budget.
And, of course, cut up all but one of your cards.  And when someone
sends you a pre-approved credit card offer, mail it back attached to
a brick.  The entertainment value of that should help distract you from
the fact that you are losing out on the chance to go deeper into debt.

	Enjoy,
	Larry

PS -- Or was there supposed to be a smiley-face on note .22?

    No smiley face intended.  It was just a large charge that boosted my
    card debt up so high.  Without that 1300$ charge last year for new
    carpet and kitchen floor my charge debt wouldn't be so bad. (Once I pay
    off the card I think I will lower the limit.  It's just nice to have a
    feeling of security that the money would be available if needed in
    emergency or absolute must (like the carpet and kitchen floor).
    
    sorry to rathole
    (fwiw I only own 1 credit card),
    
    Steve :-)

    Surely there MUST be a cheaper way of borrowing $1300 for a new
    carpet than on plastic.  My bank has given me a Line of Credit account
    at 1.5% over prime with a limit almost enough to buy a car! The account
    works like a standard bank account with cheques and automated teller
    withdrawals.  The only restriction is your minimum monthly deposits
    must total 3% of the previous month's outstanding balance.  Even a
    personal loan has to be cheaper than 18% !
    
    Is the American way to pay the banks more than they have must, in
    order to ensure the bank's solvency ????? :-) :-)  (My tongue is
    definitely in my cheek on this because people do the same thing the
    world around ... borrow money at usuary rates!)
    
    Stuart

    ya
    wait and pay cash
    
    
    buzz

    My understanding of the difference between monthly, bi-weekly, etc. is
    how the extra payments affect the amount borrowed, and therefore the 
    amount of principal lent for the remaining days.
    
    I.E., you cannot use the same amoritization schedule to figure 12
    payments at 10% interest per year and 24 payments, or 26 payments. 
    When people use the same schedule there seems to be no savings , except
    for the savings obtained by paying more money in the 26 payment
    example.   However,  my understanding is that under  the accelerated
    bi-weekly, or twice a month schedule, you can save thousands because
    you are only loaning the principal less the extra middle of the month
    payment for the remaining ~15 days of the month, therefore, each and 
    every payment causes more and more money to go to the principal, and
    less and less to the interest.
    
    In other words it is a real savings to pay every 2 weeks or twice a 
    month, if your bank allows it, and calculates the remaining balance on
    a simple interest amoritization schedule. 
    
    However, normal schedules, or tables that most ad-hocers use, are based
    on monthly calculated balances.
    
    Randy

    The following note contains a program for computing biweekly mortgage
    payments.  To use it, get the yearly interest and monthly payment
    schedule for a traditional *monthly* mortgage and feed in those
    numbers.  The program converts to a bi-weekly schedule and prints out
    the amount of principal and interest for each bi-weekly payment,
    as well as the total interest and elapsed time at the end.
    
    For example, assuming a principal of $75000 at 10% for 30 years,
    which requires monthly payments of $658 to amortize shows that
    the total interest paid would be $162,287.  However, using a
    biweekly schedule the total interest would be just $104,448
    and require only 21 years.
    
    The program converts yearly interest to a 2-week number (instead
    of a monthly number), and recalculates the principal and interest
    figures every two weeks.
    
    The warranty for the code is worth as much as you're paying for
    the code itself: el zippo.

/*
 * This program displays the payment schedule for
 * mortgage given the yearly interest rate, the
 * principal, and the monthly payment.  Basically,
 * what it does is show you how long it's going to
 * take to pay off your mortgage, as well as the
 * portions of your payment that go to principal
 * and interest.
 * NOTE: This version assumes that payments are made
 * every two weeks, and that each payment is half
 * of what the monthly payment would be.
 * So, to provide the proper inputs for this program,
 * find out what the monthly payments would be for
 * a conventional *monthly* mortage and feed in those
 * numbers to find out what a bi-weekly payment schedule does.
 */
#include stdio
main ()
{
float Principal;
float Interest, MonthlyInterest;
float BiweeklyInterest;
float MonthlyPayment;
float BiweeklyPayment;
float PaymentNumber = 1;
float InterestPayment, PrincipalPayment;
float RemainingBalance;
float TotalInterest;

printf ("%s", "Principal: ");
scanf ("%f", &Principal);

printf ("%s", "Interest: ");
scanf ("%f", &Interest);

printf ("%s", "Monthly Payment: ");
scanf ("%f", &MonthlyPayment);
BiweeklyPayment = MonthlyPayment/2.0;

MonthlyInterest = Interest/12.0/100.0;
BiweeklyInterest = Interest/26.0/100.0;
RemainingBalance = Principal;
TotalInterest = 0;

printf ("%s", "Payment    Interest   Principal     Balance\n");

while (RemainingBalance > 0)
    {
    InterestPayment = RemainingBalance * BiweeklyInterest;
    TotalInterest += InterestPayment;
    PrincipalPayment = BiweeklyPayment - InterestPayment;
    RemainingBalance = RemainingBalance - PrincipalPayment;
    if  (RemainingBalance <= 0) RemainingBalance = 0;
    
    printf ("%4.0f       %8.2f    %8.2f     %8.2f\n",
	     PaymentNumber,
	     InterestPayment,
             PrincipalPayment,
             RemainingBalance);
    PaymentNumber += 1;
    }
printf ("Total interest paid: $%10.2f\n", TotalInterest);
printf ("Number of years: %10.1f\n", PaymentNumber/26);

}

    re:-1
    I used to have a note on how to get all that in my Dir. but can not
    find it. How does a novice get that info without typing all that is
    in note .29
    
    Thanks

    While here in notes type:
    				EXT/noheader mortgage.c
    Go to main directory and type:
    			1.	Define LNK$LIBRARY SYS$LIBRARY:VAXCRTL
    			2.	CC Mortgage
    			3.	Link Mortgage
    			4.	Run Mortgage
    
    

    re:-1
    thanks, but only got up to CC MORTGAGE and it would not take it.
    I told you I was a novice. :-)

    re:-1
    Maybe you don't have a c compiler on your system.
    
    You can copy the executable program:
    
    DDIF::USERB$:[FRIDAY.PUBLIC]BIWEEKLY.EXE
    
    I'll leave it there for a few weeks and then delete it.

    I perused this file for about 30 minutes looking for an appropriate
    topic, but I didn't see anything.  If this is the wrong place, kindly
    let me know, or please give me a pointer to the correct note (there's
    LOTSA stuff in here).  
    
    Does anyone have any information on selling their own home?  FSBO, that
    is.  My husband and I would like to investigate the possibility of
    selling our own home without using a real estate agent, and we are
    wondering what steps we need to do, what information we will need, and
    any tips or hints.  Good books to read?  I need to take a day off and
    do some real research, but I thought perhaps some of you could share
    your experience/give advice/warnings/anything.
    
    Thank you,
    
    lisa

Try TALLIS::REAL_ESTATE (KP7 or SELECT to add to your notebook).

    The particular note of interest in REAL_ESTATE is:
    
   354    LEDS::LEWIS        18-AUG-1987    81  How to sell home myself?
    
    -al (REAL_ESTATE moderator)

This note has been temporarily write-locked pending approval of the author.

This subject is already under discussion in this file, in the topics listed in
the title.  Please look at these notes; you may find that your question is
already answered, or you may find a note where your question is an appropriate
continuation of the discussion.  These were found using the keyword directory
(note 1111), and you may find other notes relating to this subject by examining
the directory yourself.  Nearly all the people likely to respond use NEXT
UNSEEN, so a response to an old note will get the same exposure as a new note.

We do welcome new notes if they explore a specific aspect of a problem that may
be under general discussion.  And moderators do make mistakes. So if after
examining these notes, you wish to continue the discussion here, send mail.

Paul [Moderator]

    Why will a bank give you a mortgage with only 5% down, but
    won't refinance you when you only have 5% down? Its
    just so frustrating. 
    
    
    I've looked through all the previous notes on refinancing
    and financing and haven't seen this discussed.

    If you qualify, seek a VA loan.

    Not A veteran.  We've qualified for a regular mortgage only about
    a year ago.. I just don't understand how banks operate.  Gee,
    people are starting to get ahead, lets make it tougher for them...
    
    

Try TALLIS::REAL_ESTATE.

    Well since you are a fan of irony, have you ever wondered why a bank
    that holds your current note, and presumably already has plenty of
    reliable credit history on you, insists on doing a credit check on you
    to prove that you can afford to pay them less money than you are paying
    them today (as in the case of refinancing to a lower interest rate for
    the number of years remaining on your current mortgage)?
    
    I mean really now, if they are already expecting you to pay them $1500
    a month, and you have been doing so for years, do you really need to
    prove you can pay them $1100 a month instead?
    
    Go figure.
    
    /greg
    
    ps - irony accepts no explanations, like for instance the bank sells
         the mortgage on the secondary market to a completely different
         mortgagor, which is probably why you can't find one to refinance 
         you at 95%.

�    I mean really now, if they are already expecting you to pay them $1500
�    a month, and you have been doing so for years, do you really need to
�    prove you can pay them $1100 a month instead?
    
    They do if the reason you need to refinance is because you are paying
    $600/month more in car/education/whathaveyou loans.
    
�    Go figure.
    
    I figure this way.  It's their money.  They set the rules.

    There is a very good reason to do a credit check on you when you
    are refinancing, namely, that your financial situation at the time
    of the refinance may be different than at the time of the first
    mortgage.  For example:
    
    - job status has changed (laid off/fired)
    - salary has decreased
    - you have acquired other debts
    - payment history on bills/mortgage since the first mortgage indicates
      late payments
    - you sold off some assets that were included on the financial
      statement in the first mortgage
    
    This really belongs in note 942 (Refinancing Questions) in
    TALLIS::REAL_ESTATE.
    
    -al (real_estate moderator)

       For all they know, the mortgage payment may be the only bill you are
    bothering to pay and you're ignoring the rest of them. I'd sure like to
    know that if I were loaning you $100,000 (or whatever).
                                     Denny

    
    Several years ago when there was a good economy...banks and mortgage
    companies would let you refinance with 5% down. They have since changed
    their practice. It might have something to do with the lower interest
    rates.
    
    Mike

That and houses in MA were depreciating more than 5% a year.  They are not 
dummies.  ;-)

Stan

While all the reasons are legitimate, it still strikes me odd that if Bank A
has already lent me 100K at 11% they'd want to check me out all over to see
if it's risky to pay off that loan and relend me the 100K at 7.6%, and possibly
even deny me.

-Mike

    Yeahh but.....
    
    Regardless of your "other" debt, if you are already paying $1500/month,
    why are you MORE of a risk paying $1100/month?  Who cares what your
    other debt is.  If I had loaned you money at 11% interest, and you were
    willing to give me 3% in cash to reduce the payments to a 8% percent
    rate, why should I care about your other debts?  In fact, I may have
    just reduced my risk of you going bankrupt.
    
    All of this assumes of course that the holder of the mortgage will
    also hold the new note.
    
    But the real reason banks make you re-apply is fairly simple; the bank
    needs the option to sell your loan to a third party, and to do that
    they need all of the paper work out of the way.  After all, your debt
    and the value of your property is of concern to someone who is not
    burdened with your existing loan.
    
    I was just ticked off when the bank I had my last mortgage at wanted me
    to pay for a credit report (as well as plot plan, etc) to refinance. 
    But then again, they did give a 1/2 point discount.

    
    Here's a case that's even dumber....
    
    A guy I know got laid off. His current mortgage on his house is 12%.
    He's having a tough time paying the mortgage with this interest rate.
    His wife works, so there is money comming in. He bought the house 10
    years ago in Litchfield NH, so it's about doubled it's price. The bank
    refused him refinancing at 8% interest. At 8% they would have been able
    to keep up with all their payments. So 2 months ago the bank forclosed,
    and absorbed the loss.
    
    Mike

    re -1
    
    Well, it just goes to show you that if you are going to lose money,
    lose enough of it so that the banks have no choice except to lend you
    enough money to be able to pay them back.  It worked for Trump (and
    latin america?), it can work for you too.

�    Several years ago when there was a good economy...banks and mortgage
�    companies would let you refinance with 5% down. They have since changed
�    their practice. It might have something to do with the lower interest
�    rates.
    
    Watching other S&L's go under after making money easy for anyone to get
    might have something to do with it as well.

I must have opened the wrong notes file.  I thought I was in HOME_WORK

re: .10   -< Banker's rules were never supposed to be logical.... >-
    
>While all the reasons are legitimate, it still strikes me odd that if Bank A
>has already lent me 100K at 11% they'd want to check me out all over to see
>if it's risky to pay off that loan and relend me the 100K at 7.6%, and possibly
>even deny me.
    
    Not that I'm cynical or anything but...
    
    If you're already paying Bank A 11% interest and have a history of
    making your payments on time then Bank A will probably want to
    keep your loan.  So, they check your credit history.  If it looks
    like you are able take your business elsewhere (your credit history
    is good), they let you refinance at a lower interest rate.  If it
    looks like you won't be able to take your business elsewhere, then
    why would Bank A want to make less money on your loan?  If Bank A's
    refusal will lead you down the path to foreclosure, you should then
    try to negotiate another deal.

    Actually, very few banks keep the loan they make to you.  So once the
    paperwork settles after closing, more than 9 out of 10 times the paper
    is sold.
    
    The real reason they want/need/must re-evaluate is that it really means
    nothing that you already qualified at some prior time for the loan you
    have now.  Circumstances change, both personal and job wise.  Assets
    that looked good even a couple of yeras ago, and helped get that loan
    approved, might not look as good this time - heck, you might have sold
    the assets, and the bank in general would not know.  Borderline caes
    might have been swayed by indications of job stability; these days no
    banker would take that bet in a million years, especially in New
    England given the statements made by Digital's new President.
    
    

    
    	Even skipping all the potential issues around changes in personal
    finances, lets personify the process to perhaps make it more intuitive
    what is happening here.  Lets say you got a mortgage X years ago
    and the bank sold it to Reed (the author of .17).  You're now thinking
    of refinancing with "that same bank", but now the bank has approached
    *me* about buying the refinanced mortgage.  (It doesn't work exactly this
    way, but close enough.)  From my perspective, it doesn't matter at all
    that you proved your financial position to Reed X years ago, what matters
    is that you need to prove your financial position to me today before I'd
    be willing to buy that new mortgage.  From your perspective, its the same
    bank, the same money, the same house, the same everything (except,
    hopefully, a lower interest rate).  But from my perspective, I'm being
    asked to swap my free cash for your promises-to-pay, which makes it a
    brand new mortgage.
    
    							-craig

    This may not be the right place to ask, but ...
    
    I recently learned of something called a Homestead Exemption
    (Massachusetts). As I understand it, you file a simple document at the
    county deeds office. Once filed, this exemption protects anyone from
    taking your home if you lose a lawsuit in which someone is going
    after your personal property.
    
    This seems like such a wonderful, simple protection, why have so few
    people ever heard about it/filed one?
    
    
    ken
    

I believe this has been discussed extensively in REAL_ESTATE, probably a more
appropriate forum for this topic

Elaine

    Thanks.
    

    
    give us a pointer, I'd like to see it!
    
    Simon

    
    I couldn't find any information on this in this conference, nor
    any other conference...
    
    I am looking for the formula to compute your monthly payment for
    mortgages, based on how many months the mortgage is for, the 
    interest rate of the loan and the amount loaned.
    
    The formula might be called an 'amortization' formula?
    
    Does anyone have this formula?
    
    Thanks,
    BobF

    I'm sure there are several programs to do this in the 
    REAL_ESTATE conference.  Attached is the Fortran program I wrote
    to do this.
    
    						Steve
    
	PROGRAM AMORT
!+
! This program performs loan amortization calculations for loans which
! are paid monthly.  It uses scaled double-precision values in order to
! avoid losing fractions of cents.
!
! Author: Steven B. Lionel, Digital Equipment Corporation
!-

	IMPLICIT NONE
	REAL*8 RATE,RATE_PER_PAYMENT
	INTEGER NUMBER_OF_PAYMENTS
	REAL*8 REMAINING_PRINCIPAL
	REAL*8 MONTHLY_PAYMENT,SCHEDULED_PAYMENT
	REAL*8 MONTHLY_PRINCIPAL
	REAL*8 MONTHLY_INTEREST
	REAL*8 PRINCIPAL_FACTOR
	REAL*8 YTD_PRINCIPAL,YTD_INTEREST
	REAL*8 TOTAL_INTEREST
	INTEGER YEAR_NUMBER, MONTH_NUMBER, DAY_NUMBER, PAYMENT_NUMBER
	LOGICAL*4 DONE 
	CHARACTER*3 MONTHS(12) /'Jan','Feb','Mar','Apr','May','Jun',
	1  'Jul','Aug','Sep','Oct','Nov','Dec'/
	CHARACTER*80 FILESPEC
	CHARACTER*1 YN

11	FORMAT ($,A)
12	FORMAT (BN,2PG10.0)
13	FORMAT (BN,I10)
14	FORMAT (BN,-2PG12.0)
15	FORMAT (A)

100	CONTINUE
	WRITE (6,11) ' Enter interest rate in percent, ^Z to exit: '
	READ (5,12,END=999) RATE
	RATE_PER_PAYMENT = RATE/12.0D0
	WRITE (6,11) ' Enter number of months: '
	READ (5,13,END=999) NUMBER_OF_PAYMENTS
	WRITE (6,11) ' Enter principal amount: '
	READ (5,14,END=999) REMAINING_PRINCIPAL

	PRINCIPAL_FACTOR = 1.0D0 - ((RATE_PER_PAYMENT+1.0D0)**
	1  (-NUMBER_OF_PAYMENTS))
	PRINCIPAL_FACTOR = RATE_PER_PAYMENT / PRINCIPAL_FACTOR

	SCHEDULED_PAYMENT = DNINT(REMAINING_PRINCIPAL * PRINCIPAL_FACTOR)
	TOTAL_INTEREST = (NUMBER_OF_PAYMENTS * SCHEDULED_PAYMENT) -
	1  REMAINING_PRINCIPAL

101	FORMAT ( ' Principal amount = $',-2PF9.2)
102	FORMAT ( ' Interest rate    =  ',2PF9.3,'%')
103     FORMAT ( ' Duration of loan =  ',I9,' months')
104	FORMAT (/' Monthly payment  = $',-2PF9.2)
105	FORMAT ( ' Total interest   = $',-2PF9.2)

	WRITE (6,101) REMAINING_PRINCIPAL
	WRITE (6,102) RATE
	WRITE (6,103) NUMBER_OF_PAYMENTS
	WRITE (6,104) SCHEDULED_PAYMENT
	WRITE (6,105) TOTAL_INTEREST
	
110	WRITE (6,11) ' Do you wish an amortization report? [Y]'
	READ (5,15,END=999) YN
	IF (YN .EQ. 'Y' .OR. YN .EQ. 'y' .OR. YN .EQ. ' ') GOTO 200
	IF (YN .EQ. 'N' .OR. YN .EQ. 'n') GOTO 999
	WRITE (6,11) ' Please respond with Y or N'
	GOTO 110

200	WRITE (6,11) ' Enter loan year number (1993, etc.): '
	READ (5,13,END=999) YEAR_NUMBER
	WRITE (6,11) ' Enter loan month number (1-12): '
	READ (5,13,END=999) MONTH_NUMBER
	WRITE (6,11) ' Enter loan day number (1-31): '
	READ (5,13,END=999) DAY_NUMBER
	WRITE (6,11) ' Enter file specification for report: '
	READ (5,15) FILESPEC
	OPEN (UNIT=1,FILE=FILESPEC,STATUS='NEW',FORM='FORMATTED',
	1  CARRIAGECONTROL='LIST')
	WRITE (1,101) REMAINING_PRINCIPAL
	WRITE (1,102) RATE
	WRITE (1,103) NUMBER_OF_PAYMENTS
	WRITE (1,104) SCHEDULED_PAYMENT
	WRITE (1,105) TOTAL_INTEREST
106	FORMAT (///,T30,'Calendar year ',I4//
	1      '     Payment',T25,'Remaining',T37,'Principal',T48,
	2        'Interest',T61,'Total'/
	3      '   #     Date',  T25,'Principal',T39,'Payment', T49,
	4        'Payment', T59,'Payment'/
	5      1X,3('-------------------------'))
107	FORMAT (1X,I3,1X I2,'-',A3,'-',I4,2X,-2PF15.2,2X,3(-2PF10.2))
109	FORMAT (//' Year-to-date interest paid    = $',-2PF9.2/
	1         ' Year-to-date principal paid   = $',-2PF9.2/
	2         ' End-of-year principal balance = $',-2PF9.2)

	DONE = .FALSE.
	DO WHILE (PAYMENT_NUMBER .LT. NUMBER_OF_PAYMENTS)
	    IF (MONTH_NUMBER .LT. 12) WRITE (1,106) YEAR_NUMBER

	    YTD_INTEREST = 0
	    YTD_PRINCIPAL = 0
	    DO WHILE ((MONTH_NUMBER .LT. 12) .AND. .NOT. DONE)
		PAYMENT_NUMBER = PAYMENT_NUMBER + 1
		MONTH_NUMBER = MONTH_NUMBER + 1
		MONTHLY_INTEREST = 
	1         DNINT(REMAINING_PRINCIPAL * RATE_PER_PAYMENT)
		MONTHLY_PRINCIPAL = SCHEDULED_PAYMENT - MONTHLY_INTEREST
		IF (PAYMENT_NUMBER .EQ. NUMBER_OF_PAYMENTS) THEN
		  MONTHLY_PRINCIPAL = REMAINING_PRINCIPAL
		  DONE = .TRUE.
		  END IF
		MONTHLY_PAYMENT = MONTHLY_INTEREST + MONTHLY_PRINCIPAL
		WRITE (1,107) PAYMENT_NUMBER, DAY_NUMBER,
	1	  MONTHS(MONTH_NUMBER),YEAR_NUMBER,
	2	  REMAINING_PRINCIPAL, MONTHLY_PRINCIPAL,
	3	  MONTHLY_INTEREST, MONTHLY_PAYMENT
		REMAINING_PRINCIPAL = REMAINING_PRINCIPAL - MONTHLY_PRINCIPAL
		YTD_INTEREST = YTD_INTEREST + MONTHLY_INTEREST
		YTD_PRINCIPAL = YTD_PRINCIPAL + MONTHLY_PRINCIPAL
		END DO

	    IF (PAYMENT_NUMBER .GT. 0) WRITE (1,109) YTD_INTEREST,
	1    YTD_PRINCIPAL, REMAINING_PRINCIPAL
	    YEAR_NUMBER = YEAR_NUMBER + 1
	    MONTH_NUMBER = 0
	    END DO
	CLOSE (UNIT=1)
	GO TO 100  ! Get next loan data
999	END
    

    
    In case you don't have a FORTRAN conpiler available....
    
10	!	Mortgage	Mortgage calculation program - Version 0.1

20	Declare		Hfloat	Int_rate, &
			Hfloat	Principal, &
			Hfloat	Tot_years, &
		 	Hfloat	Mon_paymt, &
			Hfloat	Tot_paymt, &
			Hfloat	Tot_int, &
			Hfloat	Cur_int_rate, &
			Hfloat	Cur_principal, &
			Hfloat	Cur_tot_years, &
			Hfloat	One_mon_int, &
			String	File_name, &
			Byte	Mort_file_flag

30	Print
	Print "Mortgage Rate Calculator - Version 0.1"
	Print

	Print "Output file / device <SYS$OUTPUT>";
	Input line file_name
	File_name = edit$(file_name, 103% - 64%)
	Mort_file_flag = 0%
	Mort_file_flag = -1% if len(file_name)
	File_name = "SYS$OUTPUT:" unless len(file_name)

	Open File_name for output as file 1%

50	Print
	Input "Enter amount of principal"; Principal
	Print
	Input "Enter the payback period in years"; Tot_years
	Print
	Input "Enter the interest rate in percent"; Int_rate

100	Print #1%
	Print #1%, "Calculations performed using the following values:"
	Print #1%
	Print #1% Using "Principal amount:  $$#,###,###.##", &
		Principal
	Print #1% Using "Years to payback:             ###", &
		Tot_years
	Print #1% Using "Interest rate:            ###.### %", &
		Int_rate
	Print #1%
	Print #1%

	Print #1%, &
	  "       Interest        Monthly          Total            Total"
	Print #1%, &
	  "         Rate          Payment         Interest         Payments"
	Print #1%, &
	  "       --------        -------         --------         --------"

			One_mon_int = ( Int_rate * 0.01) / 12.0
			Mon_paymt = Principal * &
				    ( One_mon_int / ( 1 - &
				    (( 1 + One_mon_int ) ^ &
				    ( Tot_years * -12.0))))

			Tot_paymt = Mon_paymt * (Tot_years * 12.0)
			Tot_int = Tot_paymt - Principal

	Print #1% Using &
	  "      ###.### %   $$###,###.##   $$#,###,###.##   $$#,###,###.##", &
 	  Int_rate, Mon_paymt, Tot_int, Tot_paymt

10000
	Close 1%

	Print
	Print Num1$(page_count); " Page(s) written to "; File_name &
			If Mort_file_flag

	Print "Calculations complete" unless Mort_file_flag

32767	End
    
                        

    Whats the difference between a bank, CU, and mortgage company 
    as far as obtaining a mortgage.  In my limited research it
    seems banks offer the highest rates, CUs are a little better
    then mortgage companies have the best(lowest%) rates.  I'm interested 
    in a 15 year fixed but I wonder why everyone doesn't flock to the MC
    for the best rate ? what am I missing ?
    
    		Dean

Nothing, really.  In reality, people are flocking to the mortgage companies,
which often offer lower rates and more flexible approvals.  The banks are
really out of touch on this and many other issues.

				Steve

a couple of years ago, we refinanced with Abbey Financial.  Every week they'd
sport a BIG add in the Globe and their no-fee rates couldn't be beat.  the
salesperson even drove out to our house on a snowy night so we didn't have to
go anywhere.  he even gave us a rate that was 1/8-th below what was advertised
since the rate had gone down since.

everything went fairly well, we closed on time and the day after we got a note
from our original mortgage holder that they received the payout from Abbey (it
turns out there are a couple of extra days for you to exercise your right of
recision before Abbey pays them off), Abbey made the NATIONAL NEWS!  They
went bankrupt and lots of people (but thankfully not us) get stuck in very deep
doo doo.

the lucky people only lost a deposit.  the less fortunate ones had sales pending
in their homes and had no mortgage to buy the new home.  since the rates had
gone UP, getting a new mortgage would cost them big bucks.  depending where you
were in the process when they went bust, you lost a little or lost a lot, but
in any case you lost!

would I go with a mortgage company again?  probably, but I think I might want to
do more research and not just jump at the lowest rate.  the other factor to 
consider was when we did our refinance, there was a MAJOR business going on in
no fee mortgages.  the salesperson for Abbey told us of someone who had 
refinanced something like 8 or 9 times in 2 years.  Everytime the rate dropped
an 1/8 of a point he'd refinance since there was no cost to him.

the problem for abbey was they would give someone a mortage for say 7% and them
immediately resell it to someone else for a thin profit.  the key was volume and
always finding a buyer.  when rates started going up, Abbey was stuck with
cheap paper nobody would buy!   at least that's what I think happened to them.

-mark

When we refinanced in 93, all of the banks, and DCU, were reselling their
loans and would not allow us to eliminate escrow.  We ended up with
Homeowner's Assistance in NH which not only had the lowest rate, but allowed
us to skip escrow (and PMI).  The loan is held by private investors but HA
does the servicing, and they have been very good to us.

				Steve

> When we refinanced in 93, all of the banks, and DCU, were reselling their
> loans and would not allow us to eliminate escrow.  We ended up with
> Homeowner's Assistance in NH which not only had the lowest rate, but allowed
> us to skip escrow (and PMI).  The loan is held by private investors but HA
> does the servicing, and they have been very good to us.

	If I haven't already recommended them elsewhere, I 2nd Steve's
	recommendation.  I refinanced with HA 2-4 years ago (passage
	of time is a blur to me :-) and also went with them because
	they would waive escrow for taxes & insurance, as well as waived
	PMI (which is a given since the equity required to waive escrow
	is higher than that required to waive PMI :-).

	And the 2nd best thing I like about HA is that they do automatic
	electronic debits (ie. EFT) every month right out of my checking
	account (at no additional charge, which I've seen other lenders
	charge for, even though the lender also benifits) so I never have
	to worry about missing a payment.  They were also pretty good
	about not hassling me about my taxes&insurance.  The 1st year
	they sent me something asking for proof that I paid them, I
	ignored it, and they haven't asked since.

	And 3rd best was that it was at a time when everyone wanted the
	business so it was zero points and zero closing costs (though
	the firm/lawyer for them tried to charge me for FedEx charges
	to get the check to the previous morgage holder, which was
	right in Nashua also, but he didn't fight it and promised to
	mail me a seperate check, which he did).

	And 4th they allowed me to do what I believe they called a
	"cash out".  Ie. I refinanced for more than the outstanding
	balance of the previous loan and at the closing I got the
	check for the difference (though I could only still borrow
	70% of what the appraisal came in at so keep the escrow
	waived)

re>                       <<< Note 300.212 by BIGQ::HAWKE >>>
>                               -< Best rate... >-
>    Whats the difference between a bank, CU, and mortgage company 
>    as far as obtaining a mortgage.  In my limited research it

Generally, Credit Unions and Banks sell their "paper" to mortgage companies.  
Most often, you can get a lower rate from a mortgage company since you cut out 
the middle man/banker.

However, many banks maintain a portfolio of high quality loans.  High quality
as in the applicant has NOTHING on the debit side of the application; no car
loans, no credit card balances, no tuition loans, no 2nd mortgages, meets all
of the cash_flow criteria, etc.  In those cases, a bank will often provide a
slightly lower_than_market rate on a 15 year mortgage.  We were able to get a
full 1/2% lower than even the lowest morgage companies we queried and we got it
from a local co-operative bank. 

Dave

    I have only two experience points for mortgages.  Our original mortage
    was through a "mortgage company" in 1982 and they sold the paper 
    to Mellon Bank in Pittsburgh 2 weeks after closing.  We refinanced
    in like 88 and again in 90, and both times we did it through the
    Bank of NH.  Each time, the rates were competitive, they required no
    escrow of taxes or insurance, and they've held our "paper" each 
    time (and to this day).  So, my experience is really opposite
    of what Dave says in the previous reply.  While we're the highest
    rating for credit, we do have other debt (cards, cars) so we don't
    fit the "perfect" mold Dave eluded to......
    
    andy
    

We just bought a condo, and we financed with DCU.  A broker gave me a list
of banks and mortgage brokers she recommended, and none of them were as
flexible or had as low rates as DCU.  We have no escrow.  They'll do EFT
from your DCU account if you want (we didn't, since I wanted the flexibility
to pay with funds from various places; besides, I can always transfer the
payment from my account by phone if I want).

Re: .217

To potential lenders, being current on loans is better than not having loans
at all.  They do look at your cash flow potential.  Indeed, I've read that
some lenders look skeptical if you have only one or two credit cards (the
national average is something like four!)

				Steve

There are "mortgage companies" and there are "mortgage companies." (no typo)

There are mortgage companies that solicit your business and write your loans,
and who then sell to other mortgage companies who keep the paper and (maybe)
service the loan.

Residential mortgages are just another financial instrument, like corporate 
or municipal bonds.  Some companies specialize in them.
Apparently very few writers of mortgages keep their loans 
in their own portfolio.  When there were community banks in existence,
and such banks were the only place private individuals kept their money,
the money flowed in a fairly small community.
Sinmce more people now do mutual funds, insurance annuities, IRAs and 401(k)s,
and direct market transactions, the flow of money is wider than the local
community.

But whether the company writing loan expects to keep it or not, the loan
will almost always be written so that it can be sold in what's called
the secondary loan market.  (Even if the loan isn't sold, the bank that
holds it is likely to be.)

- tom]

    
    	I've been looking to refinance my 3 yr. variable and would like 
    some info on how to contact the place Steve was talking about(sorry
    I forgot the name). Someone else seconded his opinion and I'd like 
    to hear what they have to say.   Any help would be great!
    					Thanks  Sue Fleck
    						WMOIS::FLECK_S
    						DTN:  264-3812

>     	I've been looking to refinance my 3 yr. variable and would like 
>     some info on how to contact the place Steve was talking about(sorry
>     I forgot the name). Someone else seconded his opinion and I'd like 
>     to hear what they have to say.   Any help would be great!

	FWIW, you are allowed to go back and re-read replies you've
	already read :-)

	The name is "Homeowners Assistance", and their main office
	is in Bedford, NH.  They also had (and probably still do)
	have a Nashua office on Amherst St.  They are in the Nashua
	Phone book, and likely the Manchester book also...

Homeowners Assistance Corp. 603-598-8892

    
    	Thanks for the info!  I'm going to give them a call this 
    afternoon.
    					Sue
    
    p.s. You guy are really brutal!  I live by the motto 
    			"Don't look back" ;)

re .220 (and some others)

From a relative who is a bank loan officer (in another state so her influence 
has not enabled me to get preferential treatment, unfortunately), "Are people 
still paying attention to that urban myth?  OF COURSE banks prefer people who 
have no debt and have shown they can manage their finances."  That does not 
mean they will not continue to blindly loan (at sometimes outrageous rates) to 
poor money managers, but the better credit handlers will be able to negotiate 
lower rates.

Lenders look askance if you have no credit history.  No debt, no credit cards,
no checking account (some folks still use money orders) actually send up a flag
of potential problems; are you hiding something?   is your family so well off
you have always used cash (and, perhaps, cannot handle debt)?  are you living
off ill-gotten gains?  etc.. 

In the experience I related (not uncommon, but first hand so I felt comfortable
talking about it), the loan officer saw no outstanding debt.  As for credit
cards, since I charge EVERYTHING to get FF miles, the monthly charges can be
substantial - but I pay them off within the no-interest grace period.  In the
asset column were two cars and a boat as well as stock/fund investments.  And
our two salarys balanced off the picture of a family that knows how to spend
within its limits. 

And THAT situation, combined with a bank that was specifically looking for a 
mortagee who clearly demonstrated good family financial management habits, is 
continuing to save me money, each month, due to a lower interest rate.

Question the validity of my advice all you like, however the point remains that
I DID have this experience and I continue to enjoy a lower rate mortgage 
BECAUSE of a squeeky-clean financial position.

When looking for a mortgage, shop around and ask questions.  You never know 
what might pop up.