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Make the most of your home investment

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Ask Our Broker

Is it worth my while to pay

off my 30-year loan early?
Q: I’ve heard about various ways
to pay off a 30-year mortgage in 12
or 15 years. Do such programs make
sense?

A: A shorter loan term means a bor-

rower will pay far less interest and get
the advantage of greater monthly cash flow once the
loan ends. For instance, a $100,000 loan at 6.7 percent
over 30 years will have a monthly payment of $645.28.
The potential interest cost is $132,300 – more than the
original loan amount.
To pay off the same amount at the same rate in 15
years, just increase the monthly payment to $882.14.
The total potential interest cost for the loan is $58,785
Thus, the idea of a shorter loan term – with reserva-
tions – is attractive. Worry-free: Don’t let a long selling period derail your life. ‘If people have proper expectations ... they’re more likely to reach their goal,’ says one real estate expert.
What are the reservations?
First, before making accel- Never give
Don’t Let Selling Leave You Stressed
erated payments, always
make sure you have the right mortgage
to prepay your loan in whole money to
or in part at any time and
without penalty. Note that
anyone except No one said finding a buyer was easy, but keeping your stress level low will make the process all the more manageable
even when loans have pre- your lender
BY BARBARA BALLINGER must-move situation. Denny Grimes, owner and broker of Denny
payment penalties they often CTW Features Frayed nerves may come with the territory, Grimes & Co. in Fort Myers, Fla., suggests put-
allow for accelerated pay- but they don’t have to sabotage the selling ting away or eliminating 50 percent of what
ments.Your lender can explain your prepayment rights

in detail.
Second, if you have the right to prepay some or all of
your loan without penalty, you should not pay anyone
other than your lender for prepayment programming.
Paying several hundred dollars to set up a prepayment
program, or paying $20 or $30 a month for “administra-
tion,” simply means fewer dollars are available to pay
down your debt.
Third, never give mortgage money to anyone except
your lender. If a third party does not make your pay-
ment or if they do not pay on time, it’s your credit
report that will show the late or nonpayments, and
your credit costs will rise.
Fourth, beware of plans to automatically withdraw
money from checking accounts.The problem here is
the conflict between an automated payment and an
account with insufficient funds. Protect yourself and
always get overdraft protection.
Three basic acceleration programs look like this:
• Biweekly Payment Plans. Instead of 12 monthly pay-
ments you make a mortgage payment every two weeks,
or 26 times a year. If we say that each biweekly pay-
ment is equal to half the value of a regular payment,
See ASK OUR BROKER, Page 2
M
oving, along with death and divorce, process. Here, some real estate experts, and a you own, either by selling, donating or plac-
is considered one of life’s three psychologist, offer their tips for keeping stress ing items in a garage or storage facility. It’s
biggest stress producers.And the low and optimism high during a tumultuous also important, he says, particularly in a
increased difficulty of selling a home today in selling process. buyer’s market, for owners to consider having
many parts of the country only compounds the their homes staged and professionally cleaned
stress that moving causes. Homeowners, of GET YOUR HOUSE IN SHAPE and for brokers or salespeople to hire profes-
course, could wait out the downturn before De-clutter and purge belongings so the sional photographers for listing photos.
putting their home on the market, but there’s house looks its best and you don’t have to Kalia Rork, a saleswoman with RE/MAX
no indication of when that might be, and wait- scurry and put away furnishings, clothing,
ing is not an option if they’re in a must-sell, books and toys each time there’s a showing. See SELLING Page 2
How to Go About Going Green
Yes, they save money and in the process? Then go green founder of Renovation Planners, buildings and nearly 5 million
are energy efficient, but when you decide to buy or build a Culver City, Calif.-based remod- commercial buildings in the
a new home, and consider one el consultancy.According to United States consuming one-
there’s a lot more to know that is energy-efficient, Earth- Higgins,“going green” encom- third of all the energy and two-
about buying or building a friendly and environmentally passes maximum use of renew- thirds of all the electricity.These
conscious. able energy, minimal production buildings also significantly dam-
green home “Buying or building a new of pollution and minimal energy age urban air quality, accounting
green home is a wise choice consumption without sacrificing for 49 percent of sulfur dioxide
BY CHARLES SCUTT right now because doing so comfort, health and safety. emissions, 25 percent of nitrous
CTW Features meets the needs of the present According to the Center of oxide emissions, 10 percent of
without compromising the abili- Excellence for Sustainable particulate emissions and 35 per-
WANT TO MAKE THE neighbors ty to meet the needs of the Development, today there are
envious and save a lot of money future,” says Monica Higgins, more than 76 million residential See GOING GREEN Page 2

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 SELLING
CONTINUED FROM PAGE 1
Santa Barbara, Santa Barbara,
Calif., advises that sellers also
have their real estate profession-
als and stagers prioritize what
needs to be done.“Sometimes,
they think they have to take care
of certain things – paint the exte-
rior or redo the kitchen.That’s
not always the case,” she says.And
they also need to consider how
their house will look online on
newspaper and Realtor Web sites
and the multiple listing service.
BE POSITIVE, PREPARED, REALISTIC
A positive outlook and suffi-
cient preparation also can work
wonders. So can a dose of real-
ism.“Accept the fact that you
can’t control everything, so focus
on what you can control,” says Dr.
Terry Lyles, a Miami, Fla., psychol-
ogist who focuses on stress
reduction and who recently sold
a home himself – and survived.
INSPECT BEFORE YOU LIST
It’s better to know which sys-
tems or repairs to fix in advance,
rather than tackle them at the last
GOING GREEN
CONTINUED FROM PAGE 1
cent of the country’s carbon-
dioxide emissions – the chief pol-
lutant blamed for global warm-
ing.
“Improving these statistics has
become a strategic focus in the
construction industry,” Higgins
says.
The U.S. Department of the
Interior says that 2 million barrels
of oil a day are wasted due to
insufficiently insulated homes in
the United States, which is more
than the daily amount the U.S.
imports from Saudi Arabia.
“We are finally realizing the
true costs of our energy,” says
Eric Corey Freed, principal of
Organic Architect, San Francisco.
“Fossil fuels have political, eco-
nomic and planetary conse-
quences.The threat of global
warming has brought this to
light.”
According to the U.S. Green
Building Council’s standards, a
green building doesn’t have to
cost more than a non-green
home, says Freed.“In truth, you
cannot afford to not build green,”
he says.“The average green build-
ing feature will pay for itself 10
minute when you’re all set to
vacate.“An inspection will give
you a good X-ray of your house
and how well it might pass a
buyer’s inspection,” Grimes says.
Any changes you make will likely
benefit your listing and negotiat-
ing power. For instance, if buyers
see a leaking faucet, they may
lead them to think that other
parts of the home aren’t in top-
notch condition, says Rork.
Catching problems in advance
benefits you.“Any time you lower
a buyer’s stress about the
unknown, that’s good,” Lyles says.
However, there are excep-
tions, says Rork.“You may not
need an inspection if you recent-
ly bought your home and have a
report on file or if you live in a
new condo building. In the latter
case, present minutes from the
building’s board meetings to
show the condition and whether
there have been special assess-
ments, she says.
BE FLEXIBLE ABOUT SHOWINGS
Some homeowners feel if they
don’t have to have their house on
call 24/7, they’ll feel less stressed.
Jill Sloane, senior vice president
of Halstead Property in New
York, tries to remind clients of
times over the life of the build-
ing.We build our buildings to last
a hundred years, so why are we
focusing only on the one-time
construction cost? The real costs
are during operation, and that is
where green building will really
save you money.”
When shopping for a green
home, says Higgins, the important
technologies and features that
will positively impact you, the
earth and energy bills include
systems that conserve energy and
water, recycle waste and reduce
solid waste, and improve indoor
environmental quality.
“For example, passive solar
design that features south-facing
windows helps heat the home in
the winter and provides natural
daylight,” Higgins says.
“Xeriscaping – the use of native
plants – significantly reduces the
need for watering, fertilizing and
herbicides.And the selection of
appropriately sized heating, cool-
ing and water heaters also saves
money.”
Solar panels, water reuse sys-
tems and geothermal systems
that capitalize on the earth’s con-
stant temperature to effectively
heat and cool a home are among
today’s popular green amenities.
Other features growing in
demand include closed-cell foam
this, especially those young chil-
dren at home.
But in a crowded market, you
may not be able to be as flexible.
Grimes encourages sellers to
adopt the attitude that “a poor
showing with sheets not made
exactly right is still better than no
showing,” he says.“Most people
buying a home where someone
still resides aren’t looking for a
model home.They seek a good
deal.”
MAKE THE LISTING TIME PLEASANT
While it’s sometimes easier to
advise this than follow through,
consider bribing yourself and
family members with rewards for
different hurdles, such as flurries
of showings over a weekend or
several open houses. Grimes
thinks the right attitude is anoth-
er de-stressor.“If people have
proper expectations – a fair price
– rather than the mentality of
greed, they’re more likely to
reach their goal,” he says.
Hearing back from your agent
after each showing keeps you in
tune to what’s going on, which
can help lessen stress.
TAKE A BREAK
Get away if you have the
insulation, that offers a higher R-
value, hybrid septic systems that
use a raised sand filter and aero-
bic digester to reduce the size of
the septic field and accelerate
the time it takes for waste matter
to decompose, and different
wrap products to reduce air leak-
age and energy loss.
Robert Wisniewski, senior
technical consultant with
MaGrann Associates, Mount
Laurel, N.J., says that at a mini-
mum, all green homes should be
Energy Star-certified and also fea-
ture: high-efficiency heating, cool-
ing and lighting; proper mechani-
cal air ventilation coupled with
nontoxic finishes and furnishings
for improved indoor air quality;
water-saving, high-efficiency fix-
tures and appliances; building
products and finish materials that
contain recycled content and/or
are locally available to help
reduce the impact of transporta-
tion and environmental degrada-
tion.
“The building shell, including
insulation and windows, should
be top priority,” says Wisniewski,
who adds that energy-efficient
home features can save home-
owners a minimum of 15 percent
on heating and cooling bills.
Above all, says Wisniewski, a
green home should be affordable.
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opportunity, which benefits both
you and your salesperson.You
won’t have to keep it neat every
day you’re gone, and your sales-
person will have total leeway in
showing it. In addition, if your
home has been showing for a
longer period of time, you may
want to take it off the market
during certain times when buy-
ers are more scarce, like around
the holidays, to give yourself
some breathing room, Sloane
says.
PACK BEFORE YOU MOVE
Eventually, your house will
sell, so start packing what you
will keep in advance, which will
save you time and future stress.
When the house is sold, Grimes
helps sellers who move locally
avoid stress – and funds – by
loaning them a moving van he
owns.
AVOID FAMILY STRESS
Remaining calm and united
throughout will help your family
ride out the selling process
together.And don’t forget Lyles’
maxim:“All you need is one
buyer.”
© CTW Features
“To be green doesn’t necessarily
need to be more expensive,” he
says.“But as to be expected, there
are high-cost and low-cost green
buildings.”
Beyond the bottom-line price
to buy or build one, a green
home constitutes a feel-good pur-
chase for the owner, says
Wisniewski.
“Although a green building is
better built and more efficient
compared to a conventionally
built home, there are key ele-
ments of green building that
aren’t valued in terms of dollars,”
Wisniewski says.These include
“improved efficiencies that
reduce pollution and promote
fresh air, cleaner, free-flowing
rivers and streams and environ-
mentally sensitive site planning
that helps provide community
development and reduce ero-
sion.”
Most green building systems
and amenities pay for themselves
within the first year, says Freed.
Larger items, such as solar panels,
average five to 10 years before
the costs are recouped.
Emma Hamilton, certified eco-
broker at The Corcoran Group in
Manhattan, on the other hand,
challenges these assumptions.
“Do you ever recoup your
costs on a non-green amenity?”
Ask Our Broker
CONTINUED FROM PAGE 1
then for our $100,000 loan at 6.7 percent you will pay
$322.64 every two weeks instead of $645.28 monthly.The
result: Instead of 30 years the loan will be repaid in 24
years.
Check the numbers and you will see that on a monthly
basis you are paying $7,743.36 a year ($645.28 x 12) ver-
sus $8,388.64 ($322.64 x 26).The “trick” with the biweekly
plan is that you’re simply making the equivalent of 13 pay-
ments a year. Instead of issuing 14 extra checks, just
increase your monthly payment by 8.5 percent to get the
same result.
• Escrow Account Payment Programs.These plans have
you deposit your paycheck in an escrow account, and after
all bills are paid any monthly surplus is then used to pay
down your loan. It is claimed borrowers need a third party
for such programs because they, the borrowers, lack disci-
pline. Promoters say such plans can pay off loans in 12
years or so, but imagine how much faster a mortgage could
be paid off if there were no up-front fees to set up such
programs, no monthly charges and no interest collected by
someone else.
• Investment Offset Plans.With these programs money is
invested and the returns are then used to prepay the mort-
gage.The problem? Fees and charges, of course. But, more
importantly, what happens if the rate of return on the
investment after all fees, charges and taxes is less than the
interest rate on the mortgage? In that case, the borrower is
behind and money that could have been used to prepay
the loan is lost.
© CTW Features
Need real estate advice? Peter G. Miller, author of “The
Common-Sense Mortgage,” would love to hear from you. Send your
questions to peter@ctwfeatures.com. Due to the volume received,
not all letters may be answered.
Hamilton asks.“Unless the item in set by the U.S. Environmental
question allows you to be com- Protection Agency, is at least 15
pletely self-sufficient, it probably percent more energy efficient
won’t ever truly ‘pay for itself,’ than homes built to the 2004
but the savings on bills will begin International Residential Code
to add up, your impact on the and includes additional energy-
planet will begin to decrease and saving features that typically
your pride in yourself for making make it 20- to 30-percent more
a step in the right direction will efficient than a standard home.
grow, inspire and educate.” Wisniewski says you may also
Like real estate itself,“the want to choose a builder certi-
greening of a home is a long-term fied with LEED for Homes, a vol-
investment,” Hamilton says.“The untary rating system that pro-
initial outlay may be pricier than motes the design and construc-
the ‘regular’ version, but over tion of high-performance green
time you will see the benefits, homes of which benefits include
not only financially but as they lower energy and water bills,
relate to your health, comfort reduced greenhouse-gas emis-
level and general well-being.” sions, and less exposure to mold,
When shopping for a builder, mildew and other indoor toxins.
look for one that is Energy Star-
certified, says Wisniewski.An © CTW Features
Energy Star home meets the
guidelines for energy efficiency