Q & A With Barbara Corcoran

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Q1 - I'm a 28-year-old police officer from Queens and I'm looking for a two-family house with a basement in or around Astoria. I have not saved up for a house and I'm living pay check to pay check, but I have a great stable income. I'm looking for a two-family so my retired father and soon-to-be-retired mother can live on one floor while I live in the basement and rent the other floor out.  Are there any grants available to help do something like this?

A - What a nice guy you are, and what a great job your parents did raising you!  With only 3% down, you can qualify for a fixed-rate mortgage from the FHA.  And if you're able to find a good property before July 1st, you'll probably also qualify for a $7,500 tax credit, and that's real cash, not just a tax deduction!  You do have to pay the $7,500 back, but only over the next 15 years and it's interest-free.  Think of it as a goody bag for a good guy with kisses from Uncle Sam.

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Q2 - Where and how do you obtain accurate information on real estate market conditions for your area before you sell your house?  I know getting a realtor is the common answer, but I would like to be a little well educated before talking to one, to be able to at least make an educated guess at where I am financially so I can face my career decisions with my eyes open.

A - The smartest thing you can do is spend a weekend going to open houses looking at similar homes in your area.  If you're willing to dedicate the time, there's just no replacement for walking in the buyer's shoes.  You'll see the other houses you'll be competing against and the prices those homeowners have set.  You'll also get a valuable lesson in what not to do when selling your own home, like forgetting to dump your clutter and make the needed repairs.  Next you should go online and see what homes have actually sold for in your neighborhood.  Then you're ready to call in three competitive brokers and ask them exactly what they'll do to sell your home.

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Q3 - I formerly owned a house in Homecrest area of Brooklyn and sold it for a profit and bought a house in Elberon, New Jersey.  My husband is 79 years old and I am 71, and we now want to move back to Brooklyn where my children live.  Would we be able to find a 2-bedroom house for about $450,000 to $500,000 in the Sheepshead Bay area?  

A - Sheepshead Bay is no longer inexpensive, and for $450,000 you'll get only a large one-bedroom or small two-bedroom coop.  Instead, sell your house in New Jersey, move to Brooklyn and rent for a while.  You can take your tax-free profit, go out for dinner every week with your kids and pick up the tab!  If you still want to buy a place a year from now, there will still be plenty to choose from.

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Q4 - As a single mom I bought a home 4 years ago, not my first, and put 25% down.  I've refinanced once and also have an equity line.  My mortgage is an interest-only loan that will adjust in 3 years but my payments are already very tight.  I am now moving my elderly mother in with me to care for her.  Should I try to refinance again right now into another interest only loan for 10 years while rates are low?  Or hold out for 3 years and hope rates stay low?

A - It's not smart to make interest-only payments because you're not building equity.  What's the sense of owning a house if you're not building any equity?  And if your home continues to lose value, you'll be joining the millions of homeowners crying themselves to sleep at night because their house is worth less than their mortgage.  The most important thing for you to do now is to reduce your monthly payments.  No one can predict future rates, so act now!  A new program offered by the FHA called Project Hope is perfect for you.  You can go online at HUD.gov or call their toll-free number (800-CALL-FHA).

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Q5 - I live in California where it's not legal for homeowners to raffle off their homes.  However, if our State Electives would pass some sort of temporary measure allowing raffles, a lot of homes could be saved from foreclosure.  Do you think it's a viable idea worth pursuing further?  

A - Some raffles have succeeded in states where it's legal, but house raffles hard to pull off and usually not worth the hassle.  Just picture it.  If you have a typical $250,000 home to raffle, you'll need to sell 2500 raffle tickets for $100 each, plus a few hundred more tickets to oblige the state and make a sizable donation to your local charity.  The homeowner usually winds up refunding the ticket prices to the would-be buyers when too few tickets sell.  Spend some time online reading about the few raffles that worked, and the many that didn't, before you run down the house raffle road to no riches.

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Q6 - I am a gay early 50's man with a partner who owns a small apartment in Manhattan paid in full. We also own a multi-family beach house in the Rockaways. Where do you think is the most economical and enjoyable gay friendly place to live if we want to move out of Manhattan?  It would be difficult for us to leave, but we're not sure if we have enough money to meet the ever increasing costs of NYC living. We don't want to live full-time in the Rockaways, though it's great for weekends, it's boring year round.  

A - The latest and greatest gay community is affordable and beautiful Riverdale. Riverdale offers a quaint main street like setting with pre-war coops and it's within walking distance to Wave Hill Park and the Hudson River. And listen to this: You can get a large one-bedroom with Hudson River views for about $220k.  And in five years when the now slightly seedy shops go glam and a few restaurants convert to nightclubs, all the straight people out there will be green with jealousy as they pay double the price of what you'll pay today.  Another great spot is St. George on Staten Island.  It's within walking distance of the ferry, and this one-time summer playground of the wealthiest New Yorkers is full of beautiful Victorian homes with big gardens now being fixed up by savvy gay couples.  Restaurants have started to pop up, and a brand new gallery has even opened across the street from the dramatic, French Renaissance style city hall.