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QandA WITH PETER G. MILLER

Think Outside the Box for

Ways to Spark Interest in a
Well-Priced House
Q: We live in a small town and
have a nice brick home with an
updated kitchen on two acres. The
property also has a two-car garage
and a pole barn. Before selling we
painted and fixed up. The proper-
ty was for sale at $166,900 for
seven months but did not sell. Now the asking
price has been reduced to $159,900 – but still no
buyers. Brokers say the house is well priced.
What can we do?

A: Buyers compare properties according to their cri-

teria – and those interests and preferences may be very
different from those of sellers. If you believe the house
is competitive in terms of condition and that the price
is right, then perhaps it would be useful to change
Low-maintenance decks: Engineered decking made from recycled plastic and wood fibers resembles wood, but resists rotting, splitting and splintering, and
your offer. For example, instead of reducing the price requires no painting or staining.
again you might offer to pay the first $3,000 (or what-
ever number) of the purchaser’s closing costs. For a
buyer with limited cash, help at settlement may be The Composite Picture:
more important than a cost that will add a few dollars
per month to a 30-year mortgage.

Q: We own a house that needs renovations

Plastic,Wood Combine for Top Deck Option
worth $70,000. We would like to tear our current BY CHARLES SCUTT staining or painting every year and they polypropylene). Different brands have vary-
house down and buy a manufactured house for Content That Works won’t warp, peel, splinter or crack like many ing degrees and amounts of these materials.
$70,000 to put on our one-acre lot. We still owe wood-based decking materials, says Steve “The plastic shields the wood from insects

$50,000 and our lender will not lend us addition-
al funds. What can we do?
A: By itself the land has value, so you have an asset.
Look into an FHA 203k mortgage – this is financing
designed for those who want to fix-up a property.
However, because you now owe $50,000 and you want
to borrow $70,000, you will need financing worth at
least $120,000. Is such debt comfortable for you? If
not, it may make more sense to sell the current proper-
ty “as is” and to find another residence.
H
ow much wood can a deck-lover
chuck? All of it, if he prefers a deck that
requires little maintenance and is built
to last.
Move over, redwood, cedar and pressure-
treated lumber; the forecast calls for compos-
ites, which figure to grow in popularity as
the decking material of choice, say the
experts.
The advantages of composite decking over
traditional wood materials are significant.
Composite materials do not require sealing,
Weinstein, brand manager for the outdoor liv-
ing products division of LP Building
Products, Nashville,Tenn., manufacturer of
WeatherBest Decking.
Most composite decking “will look as
good as new for many years without cracking
or splitting and is resistant to termites, mold
and mildew,”Weinstein says.
Rod Johnson, senior product merchant for
lumber at The Home Depot,Atlanta, Ga., says
most composite decking material is made of
wood flour and plastic (polyethylene or
and moisture damage, while the wood fiber
protects the plastic from ultraviolet ray dam-
age and adds stability,” Johnson says.
Composites are well suited to all regions,
since the materials are built to withstand
extremes, from high heat and humidity to
snowy and freezing conditions.
Low maintenance isn’t the only reason
decking materials are growing in popularity.
“The ability to incorporate different shades
See COMPOSITE, Page 2

Q: I have been in my home for 12 months and

seen what I believe to be about 28 percent appre-
ciation. Our loan is now equal to less than 80
percent of the home’s market value and yet our
lender refuses to end private mortgage insurance
(MI) coverage. Are they required to end this cost?
A: No. Lenders are only required to end MI when the
original loan balance is reduced 22 percent. Lenders
might end MI coverage before then. However, they typ-
See ASK OUR BROKER, Page 2
Tips to Ensure Your Home Fits Your Future
BY PAUL ROGERS
Content That Works
The future is what home
buying is all about: Finding that
four-bedroom split-level that’s
big enough for the kids you’re
planning to have and locking
into the lowest 30-year fixed
interest rate you can get.
Unfortunately, that is where the
forethought generally stops for
many homebuyers.
“One of the biggest mistakes
people make is that they really
don’t do forward thinking.They
think immediate and don’t think
into the future,” says Anthony
Cutaia, real estate investment
advisor, mortgage broker and co-
host of the radio show,Talk
About Mortgages and Real Estate.
“A 23-year-old is thinking,‘What
do I need today?’ when he
should be thinking,‘What do I
need when I’m 40?’The 40-year-
old should be thinking where he
needs to be when he’s 50-60
years old.”
Sometimes that kind of think-
ing means challenging conven-
tional buying wisdom and some-
times it means simply consider-
ing how your life might change
after a decade.The place to start
is that fixed-rate 30-year mort-
gage.
It sounds contrary to conven-
tional thinking, says Cutaia, but
“you shouldn’t be concerned
about getting into a mortgage
where you are making principle
payments.”
A standard mortgage is like a
forced savings program with the
drawback that the money is not
See FUTURE FIT, Page 2

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Oasis, one of the new generation wood plastic composites, is engineered not from recycled plastic but from first gener-
ation polyethylene and yellow pine flour.
COMPOSITE
CONTINUED FROM PAGE 1
of colors gives homeowners a
larger choice and easier palette
to mix and match varying colors
for a unique look,” Johnson says.
Most composite decks are
advertised as lasting 25 years or
more. Composite brand war-
ranties range from 10 to 25
years.
Who’s buying composite
decking? “Generally, step-up
homes for households earning
more than $75,000 and home-
owners between the ages of 35
and 54 are the prime buyers for
single-family dwellings,”
Weinstein says.
There are a few drawbacks to
composite decking.A deck built
with low-maintenance compos-
ite material typically costs 30 to
50 percent more up front than
treated wood, says Johnson.“But
considering the time and money
needed to maintain treated
wood, a homeowner can recoup
the cost after a few years.”
Many composite decking
brands also are susceptible to
stains and fading – as much as 10
percent after installation unless
the material has an ultraviolet
(UV) inhibitor built in.
Despite many claims, no deck-
ing product is truly maintenance-
free, says Dave Tibbetts, president
of Atlanta Decking & Fence, an
exterior design company based
in Atlanta, Ga. Composite decks
FUTURE FIT
CONTINUED FROM PAGE 1
easily accessible when you need
it. In addition, after paying the
mortgage, many people have lim-
ited funds for other long-term or
unexpected needs, like college
tuition or a family emergency.An
interest-only mortgage gives you
better control of your savings.
“If you can reallocate and
make minimum payments and
put the difference into an educa-
tional fund, it’s a whole different
philosophy. Now you’re planning
for the future,” says Cutaia.“The
property is going to appreciate
whether you are paying principle
or interest only.”
The concept is even more
critical for the 50-year-old buyer.
Cutaia poses this hypothetical:A
man works all his life to pay off a
mortgage by age 66.Ten years
later he needs the money for
medical reasons. He can get it
with another mortgage, but that
costs money itself – and his cir-
cumstances may have changed,
his income is likely lower, he may
still need to be scrubbed clean
with soap and water and hosed
off.
“Composite material can be
impacted by mold and should be
protected accordingly,”Tibbetts
says.“And most are not as good
as decking replacement on older
decks, since they require tighter
spacing of joists due to reduced
dimensional strength.”
And even though the longevi-
ty of composite decking is
impressive, it still needs to be
installed atop wood or pressure-
treated framing, which will
inevitably need to be replaced
long before the composite
planks wear out.
There are more than 60
brands of composite decking on
the market, available in several
main types.
Virgin vinyl decking, one of
the most popular choices,
includes grooves in its surface to
make the vinyl more slip resist-
ant. However, the grooves can
collect dirt and since vinyl deck
pieces are hollow, unlike their
composite and recycled plastic
brethren, the product can squeak
or squish under foot.
Trex, a composite decking
product used on deck surfaces,
was one of the first widely mar-
keted non-wood alternatives. It is
comprised of 50 percent stretch
polyethylene film and 50 percent
hardwood flour.
Polypropylene composite,
available in products like
CorrectDeck, is considered to be
be unemployed or his credit
scores may have declined, mak-
ing him ineligible.
“If 30 years ago he set up a
savings program to put money
aside, he would have gotten a
greater rate of return and com-
pounded savings. He’d still have
the house but also have the
cash,” says Cutaia.“When you
become 70 or 80 years old, all
the equity in the world is mean-
ingless.You can’t go into a super-
market and say,‘I have $200,000
in equity but no cash.’”
Interest-only isn’t for every-
one.“Certain mortgage products
can be both a blessing and a
curse no matter the age group,”
says Ron Chicaferro, executive
vice president of Thornburg
Mortgage, Santa Fe.“For example,
interest-only loans can be a very
useful tool for any age but
shouldn’t be used as a way to
qualify borrowers when they
wouldn’t qualify normally.Any
age borrower needs to be careful
when dealing with a mortgage
lender.”
The point for prospective buy-
ers is to investigate alternative
mortgage vehicles and find the
Weyerhaeuser Oasis
significantly stronger than its
polyethylene competition.These
products are typically comprised
of 90 percent recycled plastic
and wood products, usually a
combination of plastic bags or
milk jugs and sawdust.
If you plan to hire a profes-
sional to construct this deck,“do
your homework and solicit bids
from at least three contractors,”
says Tibbetts.“Ideally, it would be
best to hire someone who has
experience with alternative
decking material.”
It’s also important that your
contractor “research the product
by contacting the dealer or man-
ufacturer to learn the construc-
tion details involved with the
chosen alternative decking mate-
rial,’Tibbetts says.
Weinstein recommends
checking out the Web sites of the
various manufacturers and visit-
ing lumber yards that carry these
products.“There are many colors
and textures to choose from, but
make sure the manufacturer is a
reputable one and will stand
behind his product,” he says.
© Content That Works
one that fits best not only with
current lifestyle but also with
future goals.
Mortgage, though, isn’t the
only forward-thinking exercise
recommended for homebuyers.
Experts suggest contemplating
the following:
Family size. Sure, you might
have some idea of the number of
kids you want to have, and you’ll
plan accordingly. But society is
different these days. If you think
your son or daughter is leaving
home for good when she goes
off to college, think again. More
children are coming back to
roost after earning that bachelors
or even masters degree.And with
medical costs rising alongside life
expectancies, aging relatives are
increasingly looking for living
assistance with family.The empty
nest may not stay empty for long.
Retirement activities.After
retirement, chances are you are
going to be around the house
more than in the past.“You want
to think about where you’re
going to be spending that time –
will you have a workshop or a
garden,” says Barbara Fickett,
spokesperson for the American
Ask our broker
CONTINUED FROM PAGE 1
ically want a “seasoned” mortgage – a loan that is per-
haps two years old so they can assess the borrower’s
payment practices.
Q: We’re buying a house on a land contract. We
have five years to pay monthly installments of
$500 and at the end of five years we have the
option of paying a large sum of money for this
house. Do we have to stay five years before we
can get out of this contract? The house needs
more work than we ever imagined. The value is
$20,000 less than what we are being asked to pay.
A: A land contract is an installment purchase.You
will not have title until some or all payments have been
made.The monthly payment is for the use of the prop-
erty; some of the rent, or all of it, may be applied to the
purchase price.Also, you are buying a home where a
price has been established five years in advance – so if
local home values increase you could be getting a bar-
gain, but if values fall you’ll likely re-negotiate or buy
elsewhere.
To determine what you can or cannot do – and what
the penalties might be for doing something you should-
n’t – you have no option but to have an attorney or
legal clinic review the actual agreement.
Q: I’m interested in the Florida real estate mar-
ket. I’ve been thinking of getting involved and
seeing what’s available. However, I live in
Pennsylvania and don’t really know too much
about which areas in Florida are safe bets. How
can I find the right connection?
A: I’m one of those who believe that the best real
estate investments are local – wherever “local” is for
you.The reason is that you can then closely monitor
both the property and local market trends so you have
a good idea of what’s going on.
If Florida or some other area is of interest, then make
a point of spending time there. Subscribe by mail to a
local newspaper. Check the local MLS online on a daily
basis. Get to know local brokers and lenders.At the
same time, look for properties in your local community.
You never know what may turn up.
© Content That Works
Do you have a question or a quandary about buying, sell-
ing or renting? Peter G. Miller, author of The Common-Sense
Mortgage, specializes in providing real solutions to real estate
dilemmas. E-mail your questions to
peter@contentthatworks.com.
Homeowners Association,
Stamford, Conn.
Getting around. No one likes
to think about it, which is proba-
bly one reason so many don’t.
But anyone nearing retirement
age needs to imagine oneself
with less flexibility and energy.
“If you’re considering a multi-
level structure, ask yourself if you
are going to be able to handle
the stairs,” advises Fickett.“Or
think about how a two-story
house may be adapted to single-
floor living.”
No one knows exactly what
the future holds, but homebuyers
can certainly take action to be
better prepared for a broader
range of eventualities.
© Content That Works