Tips to Homeowners

Question: I have been shopping for a condominium in the Palm Springs area. I find that the homeowner fees vary greatly, from a low of $150 to a high of over $300 a month. One project, which has guards at the entry, has fees that are much lower than other comparable projects. How are these fees determined?

Answer: If it is a new project, it is very possible that the developers are subsidizing the fees. This means that you will often find that the guards are paid by the developer, and once the project is sold out, the decision to retain the service is up to the homeowners association. I know of one project in Indian Wells where, immediately upon the sale of the last units, the guards were dismissed.

If you are really concerned about security, the fact that there are guards at the gate is much less important than whether there is a security service on duty during the hours when burglaries and theft are most common, particularly in the evenings.

Remember that the cost factors can vary greatly as a result of the type of maintenance that is necessary and the number of units in the project.

Q: I have two mortgages on my home. The first, at 13.5%, is with a lending institution and an 8% second, from the original seller, which is to be paid off in a balloon payment in about five years. I would like to refinance the entire amount so that I can bring down my total payments. However, I hate to lose the favorable interest rates on the second mortgage. Can you suggest any options?

A: The seller might be very happy to have you cash out the second mortgage. Also, you might consider asking the second mortgage holder to take a discount of the payoff. I suggest that you offer to cash out the loan for a discount of anywhere from 10% to 20%. You may be happy to find out that the holder of your second mortgage paper will be glad to accommodate you.