May 2012 Bridge Team May Newsletter

May, 2012

Thanks for viewing our May newsletter! We hope you enjoy the content of this month’s edition.

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What’s Happening Around Town?

Colorado Rockies vs. Arizona Diamondbacks
Coors Field
May 16-17

Five Points Jazz Fest
Five Points
May 19

Wicked
Buell Theatre
Through May 20

14th Annual Downtown Denver Arts Festival
Downtown Denver
May 25-28

Featured Articles

Survey’s Surprising Finding: Buy A House, Attract A Mate!

Warren Buffet Advises Investing In Homes

Take Special Care When Pruning Trees

You don’t have to be Martha Stewart to master spring cleaning

What is it about spring that puts us in the mood to clean out pantries and organize closets? That may forever remain a mystery.

What isn’t a mystery is how to get the job done. When it comes to spring cleaning, the best methods are tried and true. If your inner Martha Stewart is suddenly begging to come out and you feel the urge to declutter and organize, here are some tips:

Pare down: Go through drawers and shelves and decide what you want to keep and what has outlived its usefulness. Remember: the wastebasket is your best friend!

Group similar items: Take a look at your pantry: does peanut butter really go with tuna fish? And what are the coffee filters doing on the same shelf as the potato chips? Grouping like items makes it easier to find things without launching into frustrating scavenger hunts.

Arrange by size: Put small things in front, larger things in back on shelves and in closets. That way, everything can be seen at a glance.

Get proper containers: Without the right place to put everything, organization breaks down. To file paperwork, label folders to indicate bank statements, tax information, and so on. Egg cartons are perfect for keeping jewelry items separated. If you have photographs, toys and other items to store, consider buying colored bins. Then put like items in like-colored bins, making them easy to identify and retrieve in the future.

Utilize forgotten spaces. Opportunities to increase your storage space exist everywhere. For example, the back of a door to a closet or bathroom is a great place for towel bars, tie racks and so on. The space on a shelf above coffee cups can accommodate hooks to hang other cups. Stacking racks can help increase storage for spices, pills, and other small items.

Of course, spring often triggers another desire: to house hunt! If you’re toying with the idea of making a move, don’t forget that I’m here to help. Call me and we’ll start exploring your options during this glorious season in Colorado.

Survey’s surprising finding: buy a house; attract a mate!

In past newsletters, we’ve offered dozens of reasons for buying a home rather than renting. But here’s our best one yet: owning a home may make you more attractive to the opposite sex.

That’s the finding of a recent survey of 1,000 young people conducted by Harris Interactive on behalf of the real estate website Trulia. Of those questioned, more than a third of the women and 18% of the men said they would rather date a homeowner than a renter.

And if you live alone in that house, your chances of scoring a date go up even more. The majority of respondents – 62% – said they would prefer to date singles who don’t have roommates.

Young adults who find themselves living in their parents’ home after college didn’t fare so well in the survey: Less than 5% of those polled said they would date someone still living in his or her childhood home.

As for the amenities in a home that make homebuyers’ hearts flutter, the survey noted that the biggest turn-ons were: a master bath (preferred by 75% of women and 64% of men); walk-in closets (72% of women; 55% of men); gourmet kitchens (62% of women; 51% of men). On the other hand, respondents gave hot tubs the cold shoulder. Only 22% of women and 26% of men placed priority on having a hot tub in their prospective homes.

Weary of stock market losses? Warren Buffet advises investing in homes

When it comes to investing advice, it’s hard to imagine anyone with more credibility than Warren Buffet, the respected chairman and CEO of Berkshire Hathaway and one of the wealthiest people in the world.

So what is Buffet’s most recent investing advice?

Buy homes, he says. Lots of them.

Buffet spoke at length on the housing market during a recent appearance on CNBC’s Squawk Box. On the program, he noted that with today’s affordable prices and low mortgage rates, single family homes are an extremely attractive investment.

“If I had a way of buying a couple hundred thousand single-family homes…I would load up on them,” he said. “…It’s a way, in effect, to short the dollar, because you can take a 30-year mortgage and if it turns out your interest rate’s too high, next week you refinance lower. And if it turns out it’s too low, the other guy’s stuck with it (the mortgage rate) for 30 years. So it’s a very attractive asset class now.”

When asked whether he would buy a first home or invest in stocks, if he were a young investor, he again focused on home buying.

“If I thought I was going to live – if I knew where I wanted to live the next five or ten years, I would buy a home and I would finance it with a 30-year mortgage. It’s a terrific deal. And if I, literally, was an investor that was a handy type, which I’m not, and I could buy a couple of them at distressed prices and find renters… and again, take a 30-year mortgage, it’s a leveraged way of owning a very cheap asset right now.”

Like all investing advice, Buffet’s suggestion is keyed to this particular moment, while prices and mortgage rates are still low. The opportunity is now. “Housing will come back,” Buffet recently wrote to Berkshire Hathaway shareholders, “you can be sure of that.”

Take special care when pruning trees

It’s the time of year when homeowners are tempted to think of pruning trees in order to give their landscapes a facelift. But not all pruning is helpful or advised. If you’re looking to beautify your landscape by getting out your pruning shears, first consider some recent tips from the Denver Post:

Don’t prune randomly: Be sure you have a good reason for every cut made. “Is the limb an obstacle? Would it hit humans, autos or structure? Are limbs tangling or rubbing one another?” says the Post. Pruning simply for the sake of pruning can harm trees.

Don’t remove more than 20% of a tree’s living mass: The tree needs foliage to feed itself. It may look ragged and unsymmetrical, but if the weather has caused branches to fall already, additional pruning may hinder the tree’s ability to survive. If so, wait until next year to restore its aesthetic appeal.

Never put wound dressing on pruning cuts: These types of substances can inhibit the plant’s ability to heal and also invite pests.

Never top off trees: When you remove top growth, you can create an unsightly tree and weaken its growth.

Do the math to understand property value assessments

May is the month when homeowners receive notices of their property values for tax purposes, and sometimes, the assessed value can seem out of line. But before you get up in arms that the county has wrongly assessed your property, it’s helpful to consider the valuation process.

Residential property is assessed at 7.96% of the home’s actual value. (By contrast, commercial and industrial property and vacant land is assessed at 29% of actual value.) A home with an actual value of $250,000, for example, will have an assessed value of $19,900. This is the amount upon which taxes will be calculated.

Once that figure is established, the mill levy is applied. Mill levies vary according to jurisdiction and can change year to year. The general mill levy in Denver in 2011 was 71.307 – or $71.31 per $1,000 of assessed value. Thus, on that same $250,000 home, the final tax assessment would be: $1,354.89.

If you feel the county has overestimated your property value and plan to argue for a lower tax, keep in mind that it is very difficult to make your case unless the county has incorrectly recorded tangibles, such as square footage, number of bedrooms, etc. Intangibles, such as the decline of a neighborhood or condition of the home, are subjective and challenging to prove. The amount you recoup may not prove worth the time involved.

If you decide to contest your assessment, don’t delay. Residential protests will be heard by the assessor during the month of May only. Check your assessment notice (mailed May 1) for exact dates, times and procedures.

As FHA mortgage insurance costs rise, conventional loans may appeal

If you’re planning on buying a home, you’ve no doubt learned that your mortgage payment includes more than the base loan amount. It also includes payments toward property taxes and homeowner’s insurance. In addition, if you put down less than 20% of the selling price, lenders require mortgage insurance. This protects the lender, should a borrower default on the loan.

If you foresee financing your home through FHA, be aware that FHA’s mortgage insurance is going up to 1.75% of the base loan amount, representing an increase of .6% from 2011 premium changes – and double the premiums from 2010. This can result in a rather steep increase in your monthly loan payments.

The good news is that options exist. Conventional loans of up to 95% loan-to-value may actually net a lower monthly mortgage payment than an FHA loan. A slightly higher interest rate can provide an allowance to cover the costs of prepaying the mortgage insurance, reducing the monthly loan costs.

In short, it’s best to calculate the full monthly payment, when deciding what type of loan to take out, rather than simply comparing mortgage interest rates.

For more information on conventional loans, call or email Guild Mortgage today. Ask for
Lisa Miles or Julie Whalen: 303-320-1556; www.guildmortgageofcherrycreek.com.

Metro Market at a Glance