Saturday Reporter-Herald November 12, 2011 E1
Real Estate Matters
www.reporterherald.com • Saturday, November 12, 2011 • Reporter-Herald
Consider options with underwater home
Building a home is a
SYNERGIST process
ILYCE GLINK TRIBUNE MEDIA SERVICES
Q
uestion: I need guidance on what to do with my house. My wife, my preschooler, my infant and I are living in a house that we owe $90,000 on and that we bought eight years ago for about $100,000. Comps in our neighborhood put the current value of our house at about $50,000. Three foreclosures recently resold for about $40,000 to $50,000 in my neighborhood in the last year. Those houses were very much like mine in size, age, condition and lot dimensions. We have an adjustable rate mortgage with a current interest rate of 3.7 percent. The “margin” on our loan is 3.5 percent, which is fantastic, and the loan is tied to the one-year Treasury Note. This is not our forever house. We live about 45 minutes from where we want to establish long-term roots (different county, resources and opportunities for the kids). We bought this house as our first home and planned on living here five to seven years. We can afford the house without a problem. There is no issue there. What concerns me is being tied to the house until such a time that we can sell it and at least break even. At a yearly appreciation of 3 percent, that would take 25 years. I don’t know how this is going to shake out, but I am certain of where I am currently. I can buy houses in my area, right now, just like mine, for half of what I currently owe. I can’t see paying for a house that is worth half of what I owe and will take so long to recoup to get back to where I started eight years ago. What questions should I be asking myself to help me make a decision about what to do? What are my most responsible options? Answer: You’re already asking the right questions. Now you have to consider the consequences of the answers. You’re right: it may be years before the value of your home recovers to where it was when you bought it. Fortunately, you have the ability and the means to pay your debts and keep your home. You even have other options available to you. When property values were increasing rapidly, people never questioned selling their current home and buying another one for quite a bit more money. It was not uncommon to see a person sell a home for $200,000 and buy a new one for $400,000. The current market may have similarities but with different emotions. That home that was worth $200,000 may be worth $100,000, and the $400,000 house may be worth $200,000. If you purchased the home for $200,000, you may feel terrible that the home is now worth half of what it was worth, but if you are planning to trade up to another I See GLINK/Page E4
Bringing materials together to achieve something they could not on the own. nologies into the design standards. Appliances are a good example of increased standards and performance. As standard building codes have increased, Energy Star has started implementing new standards with their Version 3 Energy Star program. All Energy Star builders must meet all of the new requireThe Energy Star program ments by 2012. In 2010, the in the design standards has EPA started looking at the always looked at: standards and making revi• Air flow sion giving builders time to • Thermal flow implement these revisions. • Moisture flow • Additional features • HVAC efficiency • Third-party verifications 9 cubic feet and 360 kWh/year Version 3 requirements look closer at: 15 cubic feet and 1,700 kWh/year • Air flow and pressure 29 cubic feet and 420 kWh/year balancing • Thermal Flow and the types of insulation available, with emphasis on proper installation per the manufactures recommendations. • Moisture flow and the relationship to the ventilation in the home. Water management and ensuring drainage
and efficient. This is achieved through delivering homes that are uilding Science looks high-quality and meaningfulat how all the systems ly more efficient than homes in a home work tobuilt to standard codes. gether. Energy Star achieves this The EPA (Environmental Protection Agency) and DOE with rigorous specifications with consistency and (Department of Energy), through the Energy Star pro- deliberately increasing requirements. gram set out 15 years ago, With the continued began the mission to develop a Building Science base pro- advancement in the building science, material and prodgram that creates homes uct design, Energy Star has that perform and are durable, comfortable, healthy incorporated these new tech-
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Inside this week’s edition of Home & Real Estate
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Real Estate Transactions
Real Estate Classifieds
Home purchases and foreclosures in Northern Colorado
View listings of rentals, homes for sale
Page E3
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Buying a home that needs work? Call the experts in FHA 203(k) renovation financing. www.HomeStateBank.com An FHA 203(k) mortgage allows you to finance both your home purchase and renovation with a single loan. Call now to learn more. Vivian DeVoe, VP Mortgage Banker, NMLS#269876, 970-227-4702 Loans and rates subject to credit approval. Owner-occupied residences only. FHA conditions and restrictions apply.
970-203-6100 Check the license status of your mortgage loan originator at http://www.dora.state.co.us/real-estate/index.htm Think big
Bank small