Whether buying a single-family or multi-family home, the prospective homeowner must carefully review the property and perform the necessary due diligence before buying to ensure there are no buried and leaking underground oil tanks on the property. A buried and leaking underground oil tank brings with it immense liability and very often a large cleanup bill for the homeowner. Homeowners are responsible for leaking oil tanks on their property, and the Navigation Law, § 181(1), imposes strict liability (i.e., without regard to fault), against any person "who has discharged petroleum." The real danger to the homeowner, however, is the cleanup costs which can be in the tens of thousands of dollars and can grow much larger if there is active groundwater contamination. Moreover, these costs are typically not covered by most homeowners’ insurance policies. The lesson here for prospective homeowners is to be sure to search for evidence of an underground oil tank prior to purchasing the property. Here are some investigative tips to follow: Tip 1: Ask The Seller. Even if the property is currently heated by gas, or there is an above-ground oil tank in the basement, ask your seller if they ever replaced or abandoned a buried oil tank on the premises. The answer to this question will help in your investigation. If the seller divulges that there is an abandoned tank, ask for documentation to confirm that it was properly abandoned in compliance with local codes. Tip 2: Look For Evidence. Start near the boiler servicing the house and look to see if there are any old indentations or rust marks or traces of a boiler with a larger footprint. This could be evidence that an old, large oil boiler was once there. Also look around the walls of the basement to see if there are any lines (small tubing) that disappear into the walls. These would be the oil lines to the buried tank outside. They may be crimped just inside the basement wall. If you see them, do not panic. Some oil lines are left in place even after tanks are removed but if you see them it should prompt you to take the next step. You should also be on the lookout for cemented patches in the basement floor where the floor was notched in order to lay the oil lines from the boiler to the wall. Also look outside along your foundation for an abandoned oil tank vent pipe which will be coming up from the ground close to the foundation wall. Often hiring a home inspector can help with this investigative process Tip 3: Hire An Experienced Attorney. Consult with a knowledgeable and experienced real estate attorney, who can advise you on the issues and the proper course of action to be taken in regards to buried oil tanks and contamination prior to entering the contract of sale.
With record-low interest rates potential home buyers are seeking to buy and current homeowners are seeking to refinance. But low appraisals are making it difficult or even impossible for some borrowers to take advantage of this boon in record-low interest rates. The problem stems from the fact that home prices have plummeted even further than first anticipated, as wells as laws and rules enacted by legislators and lenders in the wake of the financial crisis which seek to eliminate inflated appraisal valuations and improper pressures on appraisers as seen in the housing boom have now resulted in an “over-correction” or unnecessarily conservative valuations. Also, accurate valuation for appraisals may be hard to come by when sales in the real estate market have been so anemic. There are steps, however, that you can take for a purchase or refinance transaction in order to increase the odds that your mortgage is approved and your deal gets done. Some of these steps include the following: • Know what the range of value is for your area by looking at comparable sales from the last three to six months; • Accompany the appraiser during the inspection, pointing out features and improvements that add to the home's value; • Although chances are slim, request that the lender review the appraisal findings, especially if you think the appraisal is unusually low, contains factual errors, such as the number of bathrooms and so forth, or you have more recent comparable sales that were not available at the time the appraisal was initially done and submitted; and • Start over with a new lender if your original financing falls through. For more information on this topic, see Wall Street Journal article entitled, Fighting Back Against Lowball Home Appraisals.
Shortening Loan Terms
The New York Times
By VICKIE ELMER
Published: June 1, 2012
LOW interest rates are making it easier for homeowners to reduce their mortgage payoff times considerably.
Almost a third of those who refinanced in the first quarter cut the duration of their mortgages to 15 or 20 years from 30, according to a recent refinancing report by Freddie Mac. The 31 percent who shortened their terms represented the second-highest level since 2002, when 35 percent took out shorter-term loans, the data showed. In the fourth quarter of 2011, 34 percent had reduced their mortgage terms. The all-time high occurred in 1992, with 42 percent refinancing into shorter mortgages.
“Historically low rates and an average three-quarters of a percentage point difference between 30- and 15-year mortgage fixed-rate mortgages are important drivers for moving to a shorter term,” Frank Nothaft, Freddie Mac’s chief economist, said in an e-mail.
The 15-year fixed-rate loan averaged 2.97 percent nationwide, according to Freddie Mac’s latest survey, released on Thursday. That was the lowest rate since the agency started keeping track of that loan in 1991. The 30-year loan also set another record low, at an average 3.75 percent.
The switch to shorter loan terms may also be part of a trend to deleverage and reduce debt levels, which started in the economic downturn. “People are taking control of their own equity — they’re paying it down quickly,” said Michael McHugh, the president of Continental Home Loan and president of the Empire State Mortgage Bankers Association.
Some people decide to refinance into a shorter mortgage after they have been promoted at work, said Kate McCue, an executive vice president of McCue Mortgage, a direct lender in New Britain, Conn. She suggests that borrowers look at their own financial situations, including how long they expect to live in their homes, before deciding on a shorter refinancing.
Shorter loan terms often mean higher monthly payments. But this may be offset in part by the capturing of very low rates. In the first quarter, borrowers with 30-year mortgages lowered their rates by a median 1.5 percentage points, or a savings of about 27 percent of their rate, the largest reduction recorded in Freddie Mac’s 27 years of analyses.
A shorter term may have some tax advantages as well. You restart the mortgage amortization and pay more in interest initially, Mr. McHugh said; this results in a good tax deduction for a few years.
Shorter loan terms of, say, 10 or 15 years also allow borrowers to build equity much more quickly, even when home prices are not appreciating, Mr. McHugh noted.
Borrowers can achieve similar results by paying down the balance when they refinance, by adding in extra cash — 21 percent of borrowers did so in recent months, Freddie Mac found.
If their finances or jobs are tenuous, some homeowners may be more comfortable refinancing into 30-year mortgages, then making bigger payments as often as they can, Ms. McCue said. If they suffer a financial setback, she said, they will then have the flexibility of falling back to the standard monthly payment.
If you’re not sure which term works best for you, begin your research by picking a good mortgage calculator online and crunching the numbers for various loan terms, Ms. McCue said.
Those who decide not to refinance can still pay off their mortgages faster by sending in an extra month’s payment once a year, said Chanda Gaither, a housing counselor at La Casa de Don Pedro, which works on affordable housing and neighborhood development in Newark. She has seen families save up a small amount of money every month and then annually apply it to the principal. “Or take it out of your tax return” when the refund comes in, she said.
If you made an extra month’s payment each year, your 30-year mortgage could be paid off in about 23 years, Mr. McHugh said.