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Clayton Pioneer • www.claytonpioneer.com
Ins, outs of condo buying
Letters to the Editor Thanks to the Clayton Pioneer for the series on Concord, especially the latest article on diversity. It correctly points out that Concord reflects a “cultural mix.“ But, at the same time, the article misses the obvious elephant in the room. That is that Concord is moving toward a Latino-dominate ethnicity in its population and culture. Somewhat ironically, Concord is reverting to its historic roots. And, as the article points out, this can become Concord’s “greatest strength,” as there can be great renewal and energy created by overtaking of the legacy culture by an immigrant culture. So, in this sense, I think that the analogy used near the end of the article — that Concord is some sort of a “mixed salad” — misses the point, which is that, in Concord, the “base” of the salad,
Now
May 23, 2014
essentially, is being changed. But this can make for a “better” salad in the end, just as salsa can be preferred over ketchup. Back to the article, Concord resident Eric Maldonado correctly points out, however, that the Concord City Council currently lacks the political representation for a city with an eventual Latino majority. That needs to change. The Concord City Council needs members with Latino surnames… Time will tell how all of this plays out. Again, thanks to the Pioneer for its efforts in bringing this discussion to the surface. George Fulmore Concord Send letters (limit 250 words) to tamara@claytonpioneer.com. . The Pioneer reserves the right to print exerpts or shorten to meet space constraints.
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Q. I want to buy a condominium for my first home purchase. I submitted an offer on one and the complex didn’t qualify for my loan. I am pre-approved. What are some tips for being able to get approved to buy a condo? A. A condo is a great way to get started in the market. You pay homeowner’s dues but you don’t have to worry about roofs, exterior maintenance, landscaping, maintaining the pool or facilities provided. There are some great buys in our current market, too. It is a little tricky though. Make sure your realtor and lender are versed in rules of finance for condos. I asked my preferred lender for issues to be aware of and they supplied a list of questions that need to be answered before choosing a condo complex: 1. Is the condo complex FHA approved? If yes, FHA financing is the best option for buyers who lack large down payments (20 percent or more). 2. Is the complex Fannie Mae
approved? If you are using conventional financing it still needs to be approved. The exception is for complexes with four or fewer units. 3. Is the Home Owner’s Association involved in litigation? If it is, it’s not the end of the world. Some lenders will ignore litigation if it is not on a major or structural issue, or if it involves a unit away from yours. 4. What is the owner occupancy rate? If you, the buyer, plan to occupy the unit, many conventional lenders have no issue with owner occupancy rates below 50 percent. But for investors, FHA buyers and loans requiring mortgage insurance, the owner occupancy ratios must be more than 50 percent. 5. What percentage of owners are delinquent with HOA (home owner association) dues? This needs to be 15 percent or less for most lenders. 6. Does a single entity or person own more than 10 percent of the
units in the complex? This is called the “concentration rule” and usually precludes standard financing. 7. How much exactly are the HOA dues? This must be documented because it adds to the amount for which the buyer needs to qualify. 8. Is the builder/developer still in control of the HOA? This is another issue that precludes standard financing. Once a complex is built out the owners are usually in charge of the control of the HOA. They usually hire a management company to administer. If you are considering purchasing a condo please watch the amount of the HOA dues. Some dues seem to be climbing high these days. Remember that $100 of HOA dues translates to about $20,000 more purchasing power for a singlefamily residence without an HOA. Example: a buyer qualifies for a condo with a maximum purchase price of $320,000. If HOA dues are $400 per month, this same
LYNNE FRENCH
REAL ANSWERS buyer would qualify for a $400,000 single-family residence. Four hundred dollars can translate to $80,000 more single-family residence purchasing power. In this example we are referencing a 4 percent interest rate. There is nothing wrong, though, if a condominium purchase is still for you. The safety, convenience, common areas, facilities, and freedom from maintenance costs are good reasons to purchase one. Send your question and look for your answer in a future column. Email Lynne@LynneFrench.com. French is the broker/owner of Windermere Lynne French & Associates. Contact her at 672-878 7or stop in at 6200 Center St., Clayton.
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RICHARD LITTORNO INSIGHT ON
ESTATE PLANNING With the Affordable Care Act being a hot topic in the news, you may be thinking about various health care insurance plans. One arrangement that has been soaring in popularity in recent years has been the pairing of a highdeductible health plan (HDHP) with a Health Savings
Account (HSA). The good news is that not only is an HSA a viable option to reduce health care costs, it can be beneficial to your estate plan because HSA funds grow on a tax-deferred basis. HOW DOES IT WORK? An HSA is a tax-exempt account funded with pretax dollars. Like an IRA or 401(k) plan, contributions may be made by employers, employees or both. An HSA must be coupled with a HDHP plan, however. For 2014, to qualify as an HDHP, a plan must have a minimum deductible of $1,250 ($2,500 for family coverage) and a $6,350 cap on out-of-
pocket expenses ($12,700 for family coverage). Even if you have HDHP coverage, you generally won’t be eligible to contribute to an HSA if you’re also covered by any non-HDHP health insurance (such as a spouse’s plan) or if you’re enrolled in Medicare. For 2014, the maximum HSA contribution is $3,300 ($6,550 for family coverage). If you’re age 55 or older, you can make additional “catch-up” contributions of up to $1,000. What are the benefits? HSAs provide several important benefits. First, they reduce unreimbursed health care costs by allowing you to withdraw funds tax free to pay
for qualified medical expenses. Withdrawals for other purposes are subject to income tax and, if made before age 65, a 20 percent penalty. Second, unused funds may be carried over from year to year, continuing to grow tax deferred. Essentially, to the extent you don’t need the funds for medical expenses or for other expenses before age 65, an HSA serves as a supplemental IRA. HOW
CAN AN HSA BENEFIT AN ESTATE PLAN?
Like an IRA or a 401(k) account, unused HSA balances
See Estate Plan, page 15
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May 27 last day to request mail ballots for June election Tuesday, May 27, 2014 is the final day to ask the Contra Costa Elections Office for a vote-by-mail ballot for the June 3 Gubernatorial Primary Election. Any registered voter within Contra Costa County may
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apply for a vote-by-mail ballot. There is a vote-by-mail application on the last page of the Sample Ballot Booklet, or request a ballot by emailing voter.services@vote.cccounty.us and include name, date of birth, address and mailing address. Vote-by-mail applications must be received in the Elections Office by 5 pm Tue., May 27. Voters are encouraged to
submit their application as soon as possible so that there will be sufficient time to receive, vote and return the ballot before the polls close at 8:00 pm on June 3, 2014. Voters can also drop off ballots at the Elections Office between 8 a.m. and 5 p.m. on election day. Voters may also obtain a ballot in person on Sat., May 31 between 9 a.m. and 3 p.m at the Elections
Office, 555 Escobar Street, Martinez. Any newly naturalized citizen (after May 19, 2014) may register and vote between May 20, and June 3 at the Elections Office. Each new citizen must bring their Certificate of Naturalization. For more information, go to www.cocovote.us or call (925) 3357800.
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