Q & A With Barbara Corcoran

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Q1 - My question is about PMI mortgage insurance. I've been well below the 80/20 ratio for some time and called my mortgage company, who told me I'm eligible to drop it.  But they say that first I have to pay an assessor to come out to confirm my property value. Is it legal for my mortgage company to charge me for an appraisal just to get PMI insurance waived?

A - It's a tricky mortgage market out there right now and every bank is nervous.  Usually PMI is dropped automatically when you have more than 20% equity in your home, and with house prices falling so dramatically in most parts of the country, your loan to value ratio might not be as good as you think.  So the bank can insist on an appraisal at your expense.  

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Q2 - I'd like to take advantage of the low prices and buy a condo near a beach in Florida. I plan to vacation there and/or rent the property, but I'm primarily interested in it as a good investment. I work full time in Pennsylvania and want to do the transaction online. What reputable sources can I use to find a property without getting scammed?

A - The internet's a great place to start your search for new property and there are dozens of websites to use.  But if you don't know the town you're looking for, you should take a few trips to Florida before you sign on a dotted line.  Even more important, you've got to be clear about what you really are looking for.  If you're primarily interested in getting a good investment, it's even more important to spend a lot of time in the new area before you buy because it's hard to judge values and potential returns of any area from the outside.  So start online, pick out an area that appeals to you, and then spend your next three vacations there really checking it out.  Without doing your homework, you won't make a good investment.

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Q3 - Which is a better investment when I look to resell - a larger more luxurious master bathroom, or a larger master bedroom with three big windows?

A - They're both good investments. If your three windows have a park or river view, the bedroom windows win. But if the views are nothing special, you should spend your money on a luxurious master bathroom.   

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Q4 - Which areas in Florida, if any, are expected to bounce back and appreciate the most in the next five years?

A - Most of Florida is down for the count and won't be bouncing up anytime soon. But over the long haul, the closer you are to the beach, the better the investment. In both good markets and bad markets, oceanfront properties typically command a 30-50% premium. Beachfront properties always fall last and recover first, so any extra money you put in, you'll surely get it back.

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Q5 - I want to buy a property but my credit is in the 400's. What can I do?

A - You'll have to improve your credit rating before you buy.  First, you should order your credit report from Experian or Equifax and check it for errors.  Don't close any of your credit accounts because it will only hurt your score and make your credit history look worse than it is.  Most important, work to consolidate your debt and pay it off as soon as you can.  Be sure to make every payment on time.  There's no short cut to improving your credit and without good credit you won't get a good mortgage.    

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Q6 - How do I go about getting an appraisal on my one bedroom in Chelsea?

A - The smartest thing to do is to call three competitive brokerage firms and ask their manger to recommend their top broker who specializes in your size and price category.  Invite all three in to give a price estimate, average the estimates and you should have a good sense of what your one bedroom is actually worth.  But if you're getting the appraisal for either estate or tax purposes, be sure to use an accredited appraiser.  You can find one online or check with your local real estate board.

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Q7 - What are the requirements to retire in another country? Do you have to continually renew a visa?

A - That depends on the country.  Some countries are lenient, like friendly Panama where you can live like a millionaire at 20 cents on the dollar and there are almost no requirements to moving there.  Other countries, like the unfriendly UK, insist that you be at least 60, meet set income requirements, don't plan to work there and have "a close connection with the UK," which probably means you have to be English.  You can find any country's information online if you visit consulate's website.  But don't make your retirement decision based on visa requirements.  The important considerations are cost of living, available housing, and whether the local lifestyle suits your personality.  If you're a type-A, you won't be happy long sipping mojitos in Latin America.
 

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