Sunday, May 10, 2015
Friday, May 8, 2015
Amortization
The word describes the process of accounting that will repay a loan over time. Residential buyers will most commonly be required to have an amortized mortgage.
When amortizing a fixed rate mortgage, the payment remains constant for the entire term but the allocation of what goes to principal and interest changes with each payment that is made. Since an amount of each payment retires the principal, the interest due on the next payment is calculated on the unpaid balance after the previous payment was made.
This means that an increasing amount is applied to principal on each payment while the amount owed in interest decreases. If normal payments are made each time, on time, the loan will be completed paid off at the end of the term.
You can see in the example of a mortgage of $200,000 at 3.25% for 30 years that it has a fixed principal and interest payment of $870.41. There is $541.67 due in interest with the first payment and the remainder is applied to principal leaving an unpaid balance of $199,671.25. Since the interest due in the second payment is based on a lower principal, a little more is applied to principal.
If you’d like to have an amortization schedule for a mortgage, click here and enter the information about the loan.
10932 Rhode Island Avenue S Bloomington, MN 55438
You will be impressed with this completely updated ground level condo in West Bloomington! All living spaces of this 2 bedroom, 2 bath unit are on one level. In-unit laundry is another bounus! There is a screened-in porch which opens up to a sizeable green space with mature trees. The entire home has been freshly painted and features new carpet throughout! The kitchen boasts all new stainless steel appliances, new countertops , sink and faucet, and new flooring. New doors have been installed in the home as well! The complex is beautifully maintained, has 2 outdoor heated pools, and is close to parks and trails. Freeway access is minutes away, and major shopping is close by. Pets and rentals allowed (see rules and regulations for details.) Garage #49. Directions: Old Shakopee Road to Rhode Island, South to home on the right side.
Thursday, May 7, 2015
5510 River Bluff Drive Bloomington, MN 55437
This English Tudor Style home is a picture of both warmth and elegance featured in an open floor plan. This home was the 1983 “Idea House” which was a showplace to display all the best ideas in design and architecture of the time. The entire house takes advantage of passive solar energy and the rooms are well lit with an abundance of southwest facing windows. Additional spotlights and accent lighting help to accentuate the various design elements throughout the home.
The impressive qualities of this home begin at the foyer with marble tile that continues into the hallway, laundry room and bath. The foyer has a floor to ceiling feature of a hand-carved, etched glass panel with accent lighting. A skylight brings additional light into this area. Another prominent feature is the vaulted ceiling in most of the main floor rooms, which is made of solid chestnut paneling that was imported from France.
The formal living and dining room area features a massive bricked fireplace wall with a beautiful built-in stained glass window. There is an 8-foot sliding door that leads to a 16x11 deck overlooking the beautifully landscaped back yard and pond. The dining area has a bay window.
The kitchen features authentic pegged wood floors. The cabinetry, with leaded glass doors, was designed to look like built-in furniture. There is accent lighting above and below the upper cabinets, and also around the center island. The kitchen was updated in 2010 with Cambria countertops and Electrolux appliances. The informal dining area of the kitchen overlooks the stunning 2-story atrium that drops to the lower level in a half octagon shape.
The family room is open to the kitchen, and features a wood-burning fireplace in a beautiful brick wall, which features a rough-hewn wood beam mantle. The family room has access to the screened porch.
The large screened porch boasts a vaulted ceiling of beaded west coast Douglas fir, a ceiling fan, and redwood flooring. From the porch you can go out to the redwood deck, which is a great spot to enjoy treetop views of the pond.
The owner’s suite takes up one entire end of the first floor starting with the bedroom, which has a brick wood-burning fireplace. The next area is a dressing room, bathroom, spa suite with a walk-in closet, separate shower/rest room, his and hers vanities, and an elevated, sunken Kohler spa tub with ceramic tile surround. An Anderson garden window finishes off the tub area. From the owner’s bath, you can go out to the porch to relax and enjoy views of the pond.
At the other end of the main floor is a flexible use room with crown molding, a built-in desk, and cabinetry. This space could be used as a home office, den, bedroom or guest room. Located just outside of this room is a ¾ bath.
Finishing off the first floor is the laundry/mudroom located at the garage entrance, featuring a front-loading Electrolux washer and dryer set. For convenience, there is a coat closet, another closet with shelving for additional pantry storage, a storage bench, upper and lower cabinetry, and a sink with counter space. The windows in this room overlook the front yard of the home.
The lower level is also very impressive, starting with a huge amusement room and the lower level of the 2-story atrium. Set in the corner of this area is a cozy sunken conversation pit with a gas fireplace and built-in seating. From the amusement room you can head out to the patio and enjoy the hot tub. On the opposite side of this level is the billiard room with a drop down boxed-light feature with beveled glass over the pool table. Situated in the middle of these 3 areas is the bar/kitchenette that has countertop seating available for both rooms, and includes a sink, and under counter microwave and refrigerator. A neon light over the bar is another custom feature. This entire area has crown molding. Down the hallway from the amusement room we have 3 additional bedrooms with ample closet space, and a full bath.
The outside of the home was designed with the same attention to detail. A cedar shake roof sets this home apart. The 3-car garage has built-in cabinetry, plenty of windows for natural lighting, and a finished floor. The driveway and circle turnaround are designed with interlocking brick pavers. Washed aggregate adds a unique look to the sidewalks and steps. The retaining walls and outdoor lighting enhance the landscaping elements, which boast a variety of plants for seasonal color variations. The focal point of the back yard is the scenic pond, which stays aerated to keep its lovely appearance.
The home is in the prestigious neighborhood of River Bluff Estates, located near the Minnesota Valley Country Club in West Bloomington.
Friday, May 1, 2015
Pay More or Less
Paying more for your house payment does not make your home more valuable. It does mean that the mortgage rate may be higher than it has to be.
Even though fixed rates may never again be as low as they are currently, an adjustable rate mortgage may provide the lowest cost of ownership depending on how long a borrower plans to own a home. There are different types of ARMs but the one in this example is a 30 year mortgage with the rate fixed for five years and can adjust every one year after that based on independent indexes.
Another feature of a FHA ARM is the maximum rate change in one period is 1% and the maximum lifetime cap is 5% over the initial rate.
In the example below, the payment on the adjustable is $153.48 lower for the first five years or 60 payments. Another interesting thing is that lower interest rate loans amortize faster than higher interest rate loans. In this example, the ARM has a lower unpaid balance at the end of the first five years by $4,239.
The total savings on the ARM at the end of the first period is $13,477. If a borrower felt confident they would sell the home prior to the breakeven point of 8.5 years, the ARM would produce a lower cost of housing even if the mortgage rate escalated the maximum at each adjustment period.
To help determine whether you pay more or less, consult with a trusted mortgage professional and your real estate agent to learn the advantages and disadvantages of different programs. To try your own comparison, check today’s rates at the Freddie Mac Mortgage Rate Survey and plug your numbers into an Equity Accelerator
Friday, April 24, 2015
Basic Legal Documents
Will – This is a legal instrument that specifies your desires to care for your minor children and to distribute your personal property after you die and who will manage the process. Anyone who has property and minor children needs a will.
Living Will – This legal instrument specifies your intentions regarding end of life decisions or to designate an individual to make those decisions on your behalf. Many times, a person who had been diagnosed with a terminal condition or who is facing a serious surgery or hospitalization might feel a sense of urgency to have this document.
Power of attorney – This document allows you to appoint someone you trust, not necessarily an attorney, to handle important legal and financial matters for you if you are unable to make decisions for yourself. The time limit can be for a specified period of time or indefinitely.
Trust – This arrangement involves an entity called a Trustee who takes control and manages property for someone else’s benefit called a beneficiary. When property is placed in a trust, the trust becomes the owner of the property. There are different types of trusts and a qualified advisor can explain and recommend which type would be best suited for your situation.
HIPPA Release Form – The Health Insurance Portability and Accountability Act, known as HIPPA, was created by Congress to protect the privacy of a person’s health information. Health care providers are prohibited from discussing any aspect of your medical information with anyone who is not directly involved in your care. To allow friends or family who do not have legal responsibility for you to have access to this information, this release form is necessary.
Most of the issues affecting these types of documents are determined by state law. Since they are legal documents, it is recommended that you seek sound financial and legal advice.