E1 Saturday Reporter-Herald March 26, 2011 C1 ....
Real Estate Matters
www.homeandrealtyguide.com • Saturday, March 26, 2011 • Reporter-Herald
Using IRA money may be mistake ILYCE GLINK TRIBUNE MEDIA SERVICES
Q
uestion: We sold our family farm. I took some money from my IRA and with the proceeds from the first farm, we bought another farm. Although I am 63 and do not have to pay penalty for withdrawing funds from my IRA, my wife suggested that it would make more sense to get a small mortgage rather than paying the income tax on my IRA money. I found out that I can return the funds to the IRA within 60 days without penalty and without owing any taxes. I am making arrangements to do that through a 3 percent flex rate line of credit. I tried to get a fixed rate mortgage from my bank but I was told that Freddie Mac and Fannie Mae will not allow them to make a mortgage loan to someone for six months when they pay cash for their house. Is this really true? We are in a financial crisis, and while Fannie Mae and Freddie Mac do not need to loan money to people who can’t pay it back, it makes no sense to me that they will not loan money to someone who has paid cash for a house or farm and clearly can repay the loan. Can you confirm that this correct? It looks like a bureaucratic misunderstanding to me. There probably have not been many people that have done that in the past, but I suspect it will increase as more of us baby boomers retire. Thank you very much. Answer: You are getting correct information. The mortgage market doesn’t make a whole lot of sense, but all of the players have become extremely conservative. You shouldn’t have used your IRA money — too much in taxes. If you can get a home equity line of credit — and the question is IF — then you should do that. For a variety of reasons, the mortgage market has become quite a bit more complicated. When you buy a property for cash, lenders want to make sure that you have lived in the home for some time before giving you a loan. Given the amount of fraud in the mortgage industry, lenders are more cautious than ever about doing a “cash out” refinance, where they give homeowners cash when they refinance their mortgage. What you’re asking for, essentially, is a cash-out refinance. Your home is paid off, and yet you now want a mortgage. The lender has to go through all of the steps to make sure you can afford the payment over the life of the loan. That means verifying your income and credit, savings and investments. While it’s clear to you that you can afford to make your payments, today’s lending environment requires mortgage lenders to be very sure. The default answer is “No.” In later conversations you told me that you were able to use your home equity line of credit to pay back your IRA, and are now simply looking for permanent financing. You believe I See Glink/Page C3
Welcome to the
SPRING
Home & Garden Issue
Inside you’ll find home & garden tips, informative articles and advice from our advertisers. Spring has arrived. Dig in.
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Tips for Growing DELICIOUS Tomatoes
O’MEARA’S RECOMMENDATIONS Sweet: For sweet cherry tomatoes, popular with young vegetableeaters, try “Sungold” tomatoes. They have a high sugar content — popular with children. Large: For large beefsteak tomatoes, “Brandywine” is a great choice. It consistently wins both national and regional taste competitions, she said. Cooking: Try “Amish Paste” for a great tasting cooking tomato. “San Marzano,” “Constoluto Genovese” and “Roma” are also outstanding for sauces. Heat resistant: “Black From Tula” is a variety perfectly suited for this region and puts on fruit when summer temperatures are consistently above 87 degrees, something other tomato varieties won’t do.
for ones with sturdy stems — about the diameter of a pencil, O’Meara said. Choose plants with bright green, healthy leaves. Be cautious of here are few things as symbol- yellow, brown or black leaves, purple ic to summer as picking a spots on the stem or little white plump, juicy garden-grown flies, as these can be signs of disease EXPERIMENT tomato off the vine and sinking your or insects. The most important thing when growing tomatoes is to experiment, teeth into it right there on the spot. It is also important to avoid tomaO’Meara said. “The beauty of growing your own tomatoes is that you As anticipation mounts for the com- to seedlings that already have flowget to play with things you’re not going to find at the store,” she said. ing vegetable growing season, coners or fruit, O’Meara said. She often Try planting orange or yellow tomatoes, or different shaped varieties. sider some of the following tips to sees customers proudly toting robust “There are literally thousands of tomatoes out there.” get the most out of your tomato seedlings with fruit — but the reality crop. is that once planted, these plants will spend their energy on the fruit, PLAN ACCORDINGLY not the root system. The root system the soil up to its first set of true WATER AND FEED ACCORDINGLY leaves, O’Meara said. “Your focus is the most important ingredient to Just because you start seeing O’Meara recommends setting up a right now as a gardener is all about a healthy mature tomato plant. tomato seedlings pop up in your drip irrigation system to deliver conthe roots.” local nurseries, it doesn’t mean you sistent water to tomato plants. O’Meara personally uses a method LOCATION, LOCATION, can plop them in the ground just As for fertilizer, look for a lowin which the seedling, along with the LOCATION yet. Carol O’Meara, an extension strength fertilizer to start, then feed root ball, is placed sideways in a six Choose a sunny location for tomaagent with the Colorado State Unievery 14-20 days until the first set of versity Extension in Boulder County, to plants — with at least eight hours inch trench. She pinches off the fruit gets to be two-inches wide. Afleaves that will be underground, of full sunlight a day. said although tomato plants are ofter that, no more fertilizer is needed. then gently curves the plant so the fered for sale in April, it’s imperative top two sets of leaves are above to make sure the soil is warm before MAKE THE BED TIPS TO KEEP IN MIND: ground. Amend the soil before planting planting tomato seedlings. • Back off on watering in Septemwith plant-based compost. O’Meara One way to get a head start on SUPPORT SYSTEM ber when you see green fruit emergthat, she said, is using walls of water, recommended plant-based compost ing. This will signal the plant to foOnce planted, support tomatoes in order to avoid salt issues with aniwhich act as a barrier to cold night cus on ripening the remaining fruit. with a trellis, tomato cage, pole or mal based compost. Mix one inch temperatures in the spring. Walls of • Keep red tomatoes picked. wire structure. This will help stabicompost per six inches of tilled soil. water can be found at most any nurslize the plant and keep the plant off • Continue removing any diseased ery. the soil — which often encourages leaves during the season GO DEEP The CSU Extension website, found disease, O’Meara said. • The longer tomatoes hang on When planting, think deep. If at www.ext.colostate.edu, noted that the vine, the deeper the taste of the planting upright, set the seedling in tomatoes do best if started indoors tomato. six-to-eight weeks before planting, and should be planted as soon as the danger of frost has past. Average last frost dates for the area are toward the end of May.
JADE CODY SPECIAL SECTIONS EDITOR
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CHOOSE WISELY When picking out seedlings, look
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Carol O’Meara: Use vegetables in your landscape
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