10-Minute Home Repairs

From thefamilyhandyman.com

Fix a shutoff valve

Remove, clean and replace
Remove the packing nut and unscrew the stem.Clean grit out of the washer valve body and pop on a new washer.

By Max Lemberger, a Field Editor from White Bear Lake, MN. He's a self-employed handyman specializing in minor interior repairs.

"There's nothing worse than starting a sink or toilet repair only to find that the shutoff valve won't shut off. Some shutoff valves are easy to replace. For those that aren't, I turn off the main water valve, remove the packing nut, and then unscrew the stem and take it to the hardware store to find a replacement washer. I clean any grit out of the washer valve body and pop on the new washer. Then the valve works like new."

Shutoff valve parts
Shutoff valve handle assembly. The washer is the part you'll replace.Replacement washers are available at hardware and plumbing supply stores.

Fla. cities tops in nation for home price increases

JACKSONVILLE, Fla. – Feb. 26, 2014 – A report from Black Knight Financial Services (formerly Lender Processing Services) finds that December home values in the U.S. are within 13.9 percent of the peak reached in 2006.

Black Knight’s Home Price Index (HPI) found nationally that home values rose 0.1 percent month-to-month (compared to November 2012 numbers) and 8.4 percent year-to-year. The high point for U.S. home prices was $270,000 in June 2006. In December, the HPI found a median of $232,000.

From Black Knight’s analysis, it appears most U.S. cities saw their biggest price spike last year, and their dramatic price increases have begun to slow to a more balanced level.

Florida, however, seems to buck that trend a bit, with home prices still climbing faster in comparison to other U.S. states and cities.

According to Black Knight, Florida prices rose 0.6 percent month-to-month in December, coming in second to top-ranking New York with a 0.7 percent rise.

However, Florida cities logged eight of the top 10 spots for “Biggest Movers” when comparing metro areas. Only two other U.S. cities even made the list.

Biggest metro area movers month-to-month

1. Miami: 1.2% month-to-month December price increase
2. Sarasota: 0.9%
3. Key West: 0.7%
4. Fort Walton Beach: 0.6%
5. Poughkeepsie, NY: 0.6%
6. Lakeland: 0.6%
7. Port St. Lucie: 0.6%
8. Tulsa, OK: 0.5%
9. Naples: 0.5%
10. Palm Bay: 0.5%

To calculate its HPI, Black Knight says it looks at repeat sales prices and its loan-level databases. It claims the numbers take REO and short-sale price discounts into consideration.

© 2014 Florida Realtors®

Aventura Mall to expand with more luxury shops

BY ALLISON HORTON

SPECIAL TO THE MIAMI HERALD

The city of Aventura has approved a three-level expansion. Expect to see more luxury shops.

One of the nation’s biggest and most prosperous shopping malls is about to get even bigger. The Aventura Mall will soon demolish its existing food court to build a new three-story wing of stores and a parking garage of up to seven levels tall.

Turnberry Associates, which owns and manages the mall, got the go-ahead from the Aventura City Commission earlier this month. The company hopes to begin construction by the end of the year. Plans for relocating the food court are not yet finalized, said a mall spokesman.

The 241,000-square-foot expansion will be constructed on the current food court site, near the JCPenney store. The parking garage could include as many as 1,400 spaces.

The Aventura Mall already is Florida’s largest mall and one of the nation’s biggest, with 2.7 million square feet of floor space. That makes it the nation’s 16th largest, according to Mall Directory of America; by other measures, it comes in as the third largest. It also is one of the top five highest grossing malls in the country in terms of sales per square foot, according to Turnberry.

Aventura’s owners said they have not yet inked leases for the new space. But shoppers can expect to find more luxury brands, a segment the mall has pursued in recent years.

“Continued resurgence in South Florida’s real estate market along with tourism growth and has led to significant increases in the number of affluent shoppers, specifically at Aventura Mall,” said the mall’s owners via an emailed statement. “We’ve had tremendous demand from retailers and simply don’t have enough space to satisfy their needs.

Currently, the mall houses about 300 retailers, including Bloomingdale’s, Nordstrom and Macy’s, according to Turnberry Associates. Other retailers include Louis Vuitton, Cartier and Burberry stores. The mall also features several restaurants and a 24-screen AMC movie theater with IMAX.

“It’s been incredible watching South Florida evolve into one of the world’s premier fashion destinations,” said Jackie Soffer, principal with Turnberry Associates. “We’re very excited about the continued transformation of Aventura Mall, which will provide an enhanced shopping experience for our local and international visitors.”

The increase in online shopping has stressed traditional brick-and-mortar stores, which have seen a decrease in foot traffic. But malls have responded by focusing on the in-store experience, said John Fleming, spokesman for the Florida Retail Federation. Many have increased events and freshened facilities.

“Shopping is a experience that a lot of people appreciate,” Fleming said. “It is just not the same surfing the Internet from your chair as it is walking around and having lunch and all the things people love about the retail experience.”

Aventura Mall specifically benefits from being categorized as a “destination mall” that draws residents from both Miami-Dade and Broward counties and tourists as well. To serve the needs of those shoppers, the mall will create an enclosed transportation facility for buses on the ground floor of the new parking deck.

“The bus stops are currently at five to six locations around the mall and are not that convenient to some people,” Aventura City Manager Eric Soroka said. “It is not an ideal situation as far as … mixing the pedestrian and motor vehicle traffic. This will allow all traffic from … buses to go into one consolidated place, which will be safer and … more convenient for people to use mass transit to get to the mall.”

The city is currently reviewing a traffic impact study submitted by Turnberry, said Joanne Carr, Aventura’s community development director.

Read more here: http://www.miamiherald.com/2014/02/21/3950148/aventura-mall-to-expand-with-more.html#storylink=cpy

Read more here: http://www.miamiherald.com/2014/02/21/3950148/aventura-mall-to-expand-with-more.html#storylink=cpy

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ead more here: http://www.miamiherald.com/2014/02/21/3950148/aventura-mall-to-expand-with-more.html#storylink=cpy

Inside Holly Hunter's Eclectic $8.7M NYC Apartment

CURBED.COM
by Lily di Costanzo

Oscar-winning actress Holly Hunter—of The Piano and Raising Arizona—justlisted her 3,000-square-foot, 4-bedroom NYC apartment for a sweet $8.7M.Hunter bought the place from a little-known actress by the name of Julia Roberts back in 2005 for just $4.1M, and has since transformed it into a charmingly unfussy home befitting a family with two young children. The Beaux Arts-style building was originally constructed in 1905, so it of course offers all the intricate molding, paneling, and stained glass touches that any buyer could hope for. Plus, there's that whole twice-over Oscar-winner pedigree to consider. 

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10-Minute Home Repairs

From Thefamilyhandyman.com

Lube a sticking vinyl window or door

Lubricate vinyl doors and windows
Sticky vinyl windows and doors? Try spraying dry lubricant on
the contact points and wiping it off with a rag. Don't use oil lubricants;
  they can attract dirt, and some can damage the vinyl.

By Alena Gust, a Field Editor from Deer Park, IL. She and her husband, Ray, refer to themselves as Mr. and Mrs. Fixit.

"When vinyl windows and doors don't operate smoothly, it's usually because gunk has built up in the channels. But sometimes even clean windows and doors can bind. Try spraying dry lubricant on the contact points and wiping it off with a rag. Don't use oil lubricants; they can attract dirt, and some can damage the vinyl. Pella recommends Teflon Dry Lubricant. Our daughter was getting quotes to replace her 10-year-old patio door when this “one-minute fix” saved her a lot of money."

Default on a Mortgage... Don't!

Default on a mortgage occurs when someone fails to make their mortgage payment, usually thirty days after the due date. If you do default on a mortgage, the bank will report this to a credit agency which will adversely affect your credit score right away. In a matter of weeks after having contacted you in regards to your late payments, the bank will contact a collection agency in an effort to collect your past due payments. Even if you are able to catch up with full payment including all fees levied, your credit score remains negatively impacted.

Within sixty to ninety days the bank will contact you about the default on a mortgage and warn you of impending foreclosure which will be their very next step. That means losing your home and property to the bank who will be selling it at auction. You will have the opportunity to buy your property back at the foreclosure auction but chances are, if you default on a mortgage, you won’t be coming up with that kind of cash. Most banks will refuse to accept partial payments or give you any more time to get caught up and will post a public notice of the foreclosure.

Default: Avoiding It

If you think you are at risk for default on a mortgage, the best thing to do is to be proactive by contacting your mortgage holder before this occurs. If you think you might have to miss a payment, let your lender know beforehand and you may be given an extended grace period or be permitted to make partial payments with no additional fees to you due to a financial hardship. This is of course only a temporary and short term fix which may buy you some time to get your financial house in order. It will also most probably be allowed one time only, so it’s very important to revamp your budget.

If you’ve missed a mortgage payment or are at risk for default on a mortgage, it’s time to take a look at your income and your outgo. In other words, you are either not bringing in enough income to handle the mortgage and your other expenses or you’re spending more income than you really have available. It’s time to take a good long look at your budget and goals just as you probably did before getting a mortgage in the first place. Be honest about your needs versus wants and find areas to cut back if needed in order to have that mortgage payment available when it’s due. It's important to avoid default on a mortgage at all cost.

From the Superpages.com

Rent William H. Macy and Felicity Huffman's $20K/Month Pad

Curbed.com

by Lily di Costanzo

Looks like Academy Award-nominated couple William H. Macy and Felicity Huffman are ready to add the role of "landlord" to their collective resumes, as they've just listed an utterly charming Los Angeles, Calif. property for$20K/month. The Shameless star and Desperate Housewives alum bought the 4,566-square-foot, five-bedroom spread—which happens to be right next door to the home they've shacked up in since 1998—in December 2012 for $3.8M. At the time, the place was nowhere near as light-filled and airy as it is today, but instead offered interiors so dated and stuffy that The Real Estalker wrote the place off as "dated, depressing and—let's get real—a goddam mess of the highest magnitude." Thanks to a massive renovation, though, the single-level pad is completely unrecognizable—and even boasts a new spa and sauna. Word on the street is that the neighbors are pretty cool, too, so do take a look:

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10-Minute Home Repairs

From TheFamilyHandyman.com

Cheater's chair fix

Screw those chair repairs
Drill a pilot hole and drive a screw for an ugly but sturdy chair.Be sure to use a long enough screw.

By Jeff Gorton, an Associate Editor at TFH and former general contractor.

"I know this isn't the proper way to repair furniture, but I had this ugly, rickety kitchen chair that was almost worthless. There was no way I was going to spend hours disassembling and regluing it. So I just drilled pilot holes and drove trim head screws through the bottom of the rungs and into the legs.

I didn't expect this crude fix to last long, but 15 years later, that chair is still in my kitchen, still rock solid and still ugly. If you want to cheat at a chair repair, be sure to use screws that are long enough to run through the rungs and well into the legs." By Jeff Gorton is an Associate Editor at TFH and former general contractor.

South Beach Wine & Food Festival spurs plenty of spillover parties

BY EVAN S. BENN

MIAMIHERALD.COM

Like Art Basel, the Miami Marathon and the Winter Music Conference, the South Beach Wine & Food Festival brings tens of thousands of visitors and millions of dollars into South Florida.

And much like Basel’s off-site pop-ups and WMC’s after-parties, the food festival, which opens its four-day run on Thursday, also has spurred a spillover of unsanctioned, unofficial events. From new restaurant openings to guest-chef dinners to master-mixology sessions, no fewer than two dozen rival soirees will compete with the festival’s 70-some events for attendees.

Chef Ralph Pagano will launch Naked Taco, his new Mexican restaurant at South Beach’s Dream Hotel, on Friday with a party that is billed to include “sexy taco dancers.”

“Why wouldn’t I open up this week?” Pagano said. “The culinary sensibility and awareness for this weekend has no comparison by Miami standards. “The town is littered with big-name chefs, TV stars and restaurant royalty. To me, it was a no-brainer.”

While Pagano is hoping to benefit from the festival’s popularity, others say they are filling a void for affordable food parties with breathing room.

“When I participated in the Burger Bash, it got to the point where I stopped asking my friends to come,” said Buzzy Sklar, founding owner of South Beach’s Burger & Beer Joint. “I couldn’t in good conscience ask them to spend so much money on a ticket only to be jam-packed under a tent, competing for little bites of food that most places run out of anyway.”

So Sklar helped organize Eats & Beats, a Saturday night event in the Design District’s Moore Building that will feature food from Red, the Rusty Pelican, City Hall, Brother Jimmy’s and other local restaurants along with live DJ sets. He said he expects about 1,500 people to attend; tickets cost $100, and proceeds will benefit DJ Irie’s nonprofit Irie Foundation.

Sklar said he has received no pushback from festival organizers about his event, and he’s already set on making Eats & Beats an annual party.

“We had to ask ourselves at first if we were crazy, going head to head with the Wine and Food Festival on Saturday night,” Sklar said. “But restaurants jumped on board right away, and ticket sales have been almost entirely to locals. It’s overwhelming how well Eats & Beats has been received.”

Lee Schrager, the festival’s founder and director, said he’s proud of the butterfly effect the festival has had. He said it highlights just how successful the event has become.

“I’ve always said that imitation is the sincerest form of flattery, and in this case that really is true,” Schrager said. “Similar to what we’ve seen happen with Art Basel over the years, we’ve seen an influx of pop-ups, dinners and other events leading up to and during the festival weekend as well. I think it’s great that everyone is embracing the festival spirit and offering additional ways to celebrate.”

Now in its 13th year, the Food Network South Beach Wine & Food Festival has raised more than $18 million for Florida International University’s Chaplin School of Hospitality & Tourism Management. A big part of that went into building the school’s new $7.5 million Wine Spectator Restaurant Management Lab, which hosted an inaugural dinner Wednesday emceed by Martha Stewart.

The festival got its start as the Florida Extravaganza, a one-day food and wine tasting on FIU’s Biscayne Bay campus that ran from 1997 to 2001 and drew a few hundred people. The next year, Schrager and Southern Wine and Spirits brought the festival to Miami Beach, expanding and rebranding it as the South Beach Wine & Food Festival.

Organizers extended the length of the fest as attendance continued to grow at tasting tents, wine auctions, chef demonstrations, book signings, beach parties and more. Last year, ticket sales exceeded $5.1 million for some 65,000 guests; the festival sold more than $4.1 million in sponsorships and handed over a check to FIU for $2.1 million.

Several of the star chefs who pour into Miami this week for festival duties also will carve out time and sell tickets for nonfest events.

Robert Irvine of Food Network’s Restaurant: Impossible helped create a $75 lunch menu for Tongue & Cheek on Friday. Über chef Daniel Boulud will get behind the stove of his db Bistro Moderne for a $93 lunch on Saturday. James Beard Award-winning chef Michael Anthony of New York’s Gramercy Tavern will cook a $300 dinner at the Cypress Room on Sunday.

For Boulud, the festival’s 2010 tribute dinner honoree, this week gives him the opportunity to interact with his fans and other food enthusiasts as well as to check in on his two South Florida restaurants.

“It’s the perfect timing to fulfill the needs of the festival but also do what we need to do to promote our restaurants, without stepping on the festival,” Boulud said. “Doing a lunch gives me a chance to see our regular customers in Miami and spend some time with our team there.”

Miami restaurateur Michael Schwartz is not personally participating in any official festival events this year, but his Genuine Hospitality Group is bringing in out-of-town chefs to host pop-up dinners at Harry’s Pizzeria and Michael’s Genuine Food and Drink, in addition to the Gramercy Tavern dinner at Cypress Room.

Other events you won’t find on the festival’s website: Pubbelly Steak had a $125-a-person wine dinner Wednesday, and its flagship sibling Pubbelly will be passing out free bites of pork after midnight. New York bar The Dead Rabbit is taking over the stick at Patpong Road on Friday and Saturday, and master mixologist Jacques Bezuidenhout will shake up free tequila cocktails at the Social Club on Friday.

Riding the festival’s coattails makes good business sense, said Pagano of Naked Taco.

“For chefs, hospitality and service-industry pros, this week is our Super Bowl,” he said.

Read more here: http://www.miamiherald.com/2014/02/19/3946651/south-beach-wine-food-festival.html#storylink=cpy

Remodeling no longer done just to increase value

NAPLES, Fla. – Feb. 17, 2014 – The big rip-out is back. After years of marshaling their money and putting off all but the most essential repairs, Southwest Florida homeowners are opening their wallets to improve their homes.

But now they’re doing it for a different reason: for the fun of it.

“People are fixing homes up for style and aesthetics,” said Stephen Jaron, president of Renovate and Restore in Naples. “They want to make their homes more personal.”

Many are eschewing safe, traditional upgrades that won’t offend some future buyer in favor of wildly quirky re-dos that incorporate everything from built-in dog beds to turquoise cabinets and alligator-head towel racks.

“With the housing market so lucrative, people aren’t afraid they’ll lose money anymore,” said Parker Borelli, owner of Borelli Construction in Naples.

In his own practice, Borelli has seen budgets for a typical redo of a two-bedroom condo rise to around $110,000, almost double what owners were likely to spend two years ago.

And in the upper end, the sky’s the limit: One Grey Oaks owner recently asked him to put a marble driveway, fire pit and reflecting pool in his 2,500-square-foot guest house, to match similar amenities in the main house.

Rising home equity, improving consumer confidence and historically low interest rates – along with pent-up demand – are behind the trend, said David Crowe, chief economist of the National Association of Home Builders.

The trade association’s Remodeling Market Index, activity as reported quarterly by remodelers, was at 57 in the fourth quarter of 2013 – its highest level since the first quarter of 2004.

The Joint Center for Housing Studies of Harvard University predicts remodeling will remain strong throughout 2014. The Joint Center’s leading indicator of remodeling activity shows spending for improvements at $144.7 billion in the first quarter, a 14 percent rise over the same period a year earlier. By the fourth quarter, the Joint Center expects it will reach $153.8 billion, a 9.9 percent annual rise.

Many are investing sizable sums to get what they want.

Take Denise and Tim Rose, both 57, who are on the second remodel of the $1.4 million home on Marco Island they bought seven years ago.

Although they originally intended to spruce up just a few rooms, they wound up redoing nearly all of it, at a cost of about $500,000.

Many of their upgrades, like 16-foot ceilings and glass doors, were done to maximize their expansive waterfront views.

But others, like a radius wall embedded with blown glass; an abstract painting that drops down to cover the television when it’s not in use, and a couch-high window-seat for their Maltese terrier, are individualistic touches inspired by the casinos and hotels Tim Rose develops.

“We want what we want,” Denise Rose said.

Bonita Springs remodeler Olaf Kuemmel, owner of SWF Construction, said one Canadian client recently bought an $800,000 home in Bonita Bay and spent about $300,000 with him to remodel it.

The owner asked Kuemmel to rip out the nearly new kitchen cabinets because he didn’t like the natural maple color and to replace them with brown-toned cherry cabinets. The appliances and countertops got the heave-ho, too.

Then he asked Kuemmel to replace 3,800 square feet of tile floors with hand-scraped hickory, and to redo the master bath in an ultra-contemporary style that included numerous body-spray heads.

When it was done, “it looked like a car wash,” Kuemmel said.

In some cases, homeowners are backing into a big redo of their homes after having to do some essential repairs.

Melanie Cusano said her family-run business, Bruno General Contractor, moved into fire-, mold- and water-related restoration from general remodeling during the recession. But now customers who have received insurance checks are starting to kick in their own money to go way beyond just fixing the damage.

“They tell us ‘since you’re in there anyway, let’s do some more,” she said.

In one recent case in North Naples, a customer got a check for about $30,000 when his water heater exploded.

But he decided to spend more than $70,000 more out of his own pocket to upgrade the cabinets and flooring – and take out a little-used loft to create trendy vaulted ceilings.

Another Bruno customer, Dwaine and Cathy Peetz of Omaha, spent more than $300,000 to renovate the three-bedroom Naples waterfront condo they purchased for a little more than $1 million in 2011.

They had the place gutted and replaced everything from the windows to the floors. Instead of safe neutrals, they chose a palette of bright Caribbean colors. The centerpiece of the remodel was their new kitchen with turquoise-colored accent cabinets and aqua tile backsplash to match the vein of turquoise running through their new granite countertops.

We put in what my wife wanted to match her artistic taste. We’re not concerned about resale.”

The latest statistics from research firm CoreLogic support this relaxed attitude about resale: excluding distressed sales, home values in the Naples-Immokalee-Marco Island area rose 10.1 percent in December 2013 from a year earlier. In Cape Coral-Fort Myers, they were up 8.1 percent for the same period.

And so homeowners are feeling freer to put in funky details that they’d never consider if they were trying to appeal to the masses, said Michael Park, owner of Dreamworks Kitchen and Bath in Naples.

Some clients are expressing themselves with expensive kitchen knobs to top off their remodeling projects, he said. One chose a different style of lizard for each of her cabinets, at a cost of $15 a knob. Another spent $50 a knob for two 4-inch tall ceramic fish. “When the doors are closed, the fish go kissy-kissy,” he said.

But the strangest request he’s had lately was from a woman who asked him to bolt a full-sized bronze alligator head she’d picked up into the wall above her new tub.

“She wanted to hang her towels and swimsuit from the teeth,” he said.

© 2014 the Naples Daily News (Naples, Fla.), June Fletcher. Distributed by MCT Information Services

Ivana Trump Lists Palm Beach Mansion for $18.9 Million

By: Neal J. Leitereg

 REALTOR.COM

Ivana Trump’s business acumen may revolve around mostly fashion and jewelry, but that doesn’t mean she didn’t learn a thing or two about the real estate world from her entrepreneurial ex-husband, Donald Trump.

The former fashion model, socialite and mogul in her own right has listed a palatial mansion-estate in Palm Beach, FL. Following her divorce from Donald in the early 1990’s, Trump paid $4.4 million for the oceanfront property, which is found just four blocks away from Mar-a-Lago, the former Trump family compound that sold in 2008 for $100 million. She now looks for a return on her own investment after listing the Mediterranean spread for $18.9 million.

Located along the aptly named Jungle Road, Trump’s landmark estate was built in 1926 and has nine bedrooms, 13 bathrooms and more than 14,400 square feet of living space. Exuding a Moroccan vibe, its interiors feature stenciled beamed ceilings, tile and wood flooring, detailed fireplaces, and an overall jewel tone color scheme that complements the home’s tropical surroundings.

Showcasing a mix of luxury design and modern convenience that few can afford, the chef’s kitchen has a tiled center island and restaurant-quality equipment, and the master suite appears as distinctive as any suite in a Trump Tower penthouse.

Outside, a covered loggia extends over a long dining room space, which overlooks a central atrium-style patio and plunge pool; while an underground tunnel leads away from the home to a secluded beach.

After her split from The Donald, Ivana Trump, 64, reinvented herself as a self-help author and fashionista. In recent years she has dabbled in reality television, appearing on England’s “Celebrity Big Brother,” and launched her own collection of wines through Legends Wines.

Palm Beach broker Lawrence Moens of Lawrence A. Moens Associates has the listing.

Tips on Saving Electricity and Lowering Your Electricity Bill

From TheFamilyHandyman.com

Run your refrigerator for less: Save up to $60 a year

Clean coils
Brush and vacuum the coils at the bottom or the back of the refrigerator.
A coil cleaning brush (available at appliance parts stores or
home centers) is bendable to fit in tight areas.

Your refrigerator uses more electricity than all your other kitchen appliances combined. To keep its energy costs down, clean the coils twice a year, which improves efficiency by 30 to 50 percent.

Your fridge and freezer run more efficiently when they’re full. Put water containers in the fridge and ice bags in your freezer to keep them filled. Keep the refrigerator setting between 35 and 38 degrees and the freezer between 0 and 5 degrees F.

Refrigerator door seals wear out over time. Test your seal by closing a dollar bill in the door. If it pulls out easily, replace the seal.

If your fridge was made before 2001, it’s using at least 40 percent more electricity than new Energy Star models. If you’re replacing your fridge, buy an Energy Star model and recycle your old one. Don’t hook up the old one in the basement or garage—an inefficient refrigerator costs as much as $280 a year in electricity. Any money you save buying food in bulk and storing it in an inefficient second fridge is lost in electric costs.

Determining Interest Rates Mortgage Companies Charge

The interest rates mortgage companies charge for home loans is a critical factor in determining monthly mortgage payments. Negotiating for the best interest possible greatly reduces costs on a monthly basis and over the life of the loan.

Determining interest rates

The starting point lending institutions use to determine their interest rate for mortgages is the rate charged by the Federal Reserve Bank. As the Federal Reserve adjusts its rates, up or down, mortgage lenders follow suit. (Bear in mind that the interest rate differs from the Annual Percentage Rate (APR). The APR is what the annual cost of the loan is, with costs and fees added included.)

Using the Federal rate as a baseline, mortgage lenders then begin the process of assigning interest rates for various types of loans and the conditions that accompany them. The amount of the loan and the interest rate borrowers pay is directly affected by their credit rating or history, their ability to meet monthly payments, and their collateral – usually the value of the property itself.

Because lending money is considered a risk, and banks want to recoup their investment, interest rates are assigned according to that perceived risk. Those who are the most likely to repay the mortgage according to the terms of the loan are considered the least risky and are assessed the lowest interest rates. Those believed to be less or least likely to repay a loan are assigned higher interest rates.

The Borrower's Portfolio

Credit - The better a borrower’s credit rating is, the lower the interest rate that will be charged. The reason behind this is that a better credit rating is an indicator that the borrower will, in all likelihood, repay the mortgage. As the credit rating decreases, the interest rates mortgage lenders charge.

Capacity – The ability of the borrower to meet monthly loan obligations is another factor. The mortgage underwriter will look at the borrower’s salary, employment history, and monthly expenses to make this determination.

Collateral – Interest rates are affected by the collateral a borrower has when the loan assumed. Typically, the property is used, and its value in relation to the amount borrowed is taken into consideration. If the greater the difference between the amount of the loan and the value of the home, the lower the interest rate that will be made available. The closer the two figures are, the higher the rate.

Loan Type

The type of loan assumed is also a factor. Fixed Rate Mortgages (FRMs) and Adjustable Rate Mortgages will start with the lowest rates. Subprime mortgages, Jumbo mortgages, and Super Jumbo Mortgages all have noticeably higher interest rates, due to increased risk factors.

With all of the different loan options, and the wide range in interest rates mortgage companies charge, an educated borrower is in the best position obtain the best terms. Researching, planning, and working with competent and reputable firms ensures that an individual looking for a home loan can acquire the best interest rates available for a mortgage.

From the Superpages.com