Can Your Homeowners Association Say No To Security System Signs?

HOA expert Richard Thompson answers your questions about living in condos, co-ops and communities with homeowners associations.

Q: Does the homeowner association have the right to restrict home security system signs in the common area outside of the homes?

A: The HOA usually has the right to limit signs in the common area and what is placed in home windows. Small security stickers on the window are usually allowed. The main concern is curb appeal. Uncontrolled signage creates a cluttered look and reduces property values.

Q: I don’t feel the board spends money in our best interests. I protested by withholding payment until year-end. Recently, I received a notice saying if I didn’t pay, they would put a lien on my home. Can they do this? Am I wrong to protest this way?

A: Withholding assessments in protest is not the way to get your point across and, yes, the board has both the right and duty to process collection on delinquencies. I assume your concerns are for the community as a whole and not for personal issues.

Your points and solutions should be made in writing to the board. Whether they act on them or not is another question. If they don’t and you feel strongly that they should, I encourage you to run for election so that you can have a direct effect on the outcome. It’s every owner’s duty to serve.

Q: Is it very difficult to change the governing documents? What’s the process?

A: If you are thinking about amending your governing documents, you should consult with an attorney specializing in HOA law. There are state and federal laws to consider as well as practical applications that need to be harmonized. Once the amendment(s) are approved, they usually need to be recorded. The attorney can assist with this as well.

Q: Should we include landscape items in our Reserve Study? How about insuring trees?

A: It’s wise to include “Landscape Renovation” and “Tree Work” in the Reserve Study. All bushes and trees have a limited life. Bushes die and outgrow their location.

While trees usually have a long life, they require corrective pruning that should be done every three to five years and is expensive.

Hiring an arborist to do a comprehensive inventory and report on the trees also makes a lot of sense. If each tree is tagged and referenced in the report, maintenance can be easily tracked. Consistent corrective pruning will extend the lives of the trees and keep them looking good.

Insurance for non-income producing trees provides limited coverage for claims related to fire, lightning, explosion, riot, aircraft, vehicles, vandalism and theft. Most tree claims are related to vehicle damage. Wind, freezing and pest claims are not honored.

Tree insurance does not actually insure the trees for value but provides replacement in standard nursery sizes.

In other words, that wind-fallen 80 foot Douglas fir will probably get you an 8-12 foot replacement. Based on the coverage available, $5,000 coverage will cover quite a few replacements.

To avoid the possibility of insect infestation, use native trees that are hardy and pest resistant. If you already have those prone to insects, consult with an arborist for the proper preventive maintenance or alternatively, cut them down and replace them.

Used with permission from Richard Thompson of


FICO Changes Score Calculations: Will Your Score Rise?


A change in the way the popular FICO credit score is calculated could boost your score if:

  • You’ve settled past debts with a collection agency.
  • You have unpaid medical bills.
  • Your credit is thin because you’re just starting out or you’re a retiree who no longer uses a lot of credit.

Fair Isaac, the company that sells the FICO credit score to mortgage lenders, auto lenders, credit card companies and banks, says it’s changing its formula to give less importance to unpaid medical bills and debts that consumers settled with collection agencies.

In general, the higher your credit score, the less interest you pay when you borrow money to buy a home or a car, or to pay via a credit card. If your score drops too low, you may not be able to get a loan or a credit card.

Here’s what will change starting this fall:

  • If your medical debt is the only unpaid bill on your credit report: Your score could rise by about 25 points.
  • If your debt was sold to a collection agency and you then paid it: That won’t lower your FICO score.
  • If you don’t use credit much: Fair Issac will use other data, like rent payments, to bolster the accuracy of your score.

Fair Issac made the change after a Consumer Financial Protection Bureau report argued that medical debt isn’t a strong indicator that a consumer won’t pay other types of debt.

When your credit score rises, chances are you’ll first see an improvement in the rates you’re charged for credit cards, auto loans and personal loans.

Your mortgage rate may take longer to come down because most lenders follow Fannie Mae and Freddie Mac’s lending guidelines. Those guidelines tell lenders to use a very specific mortgage credit score rather than the latest version of the FICO score.

Currently, the average Fannie Mae borrower has a FICO of 744, while the average Freddie Mac borrower has a 749.

Is Now The Right Time To Refinance Your Mortgage?

To find the right time for you to refinance, answer these four questions:

1. What’s your interest rate versus the interest rate you could get today?

The bigger the difference between your rate and today’s rate, the more you can cut your monthly payment by refinancing. If you have a $100,000 mortgage:

  • At 6 percent, you pay about $600 a month in principal and interest
  • At 5.5 percent you pay about $568
  • At 5 percent you pay about $537

2. Do you need a more predictable mortgage payment?

If you’ve got an adjustable-rate mortgage, refinancing into a fixed rate mortgage lets you lock in a rate, This way you know exactly what your future payments will be. You pay a higher interest rate for that benefit.

Lenders also make you pay more for ARMs that don’t reset for a long time. The longer the initial rate lasts, the higher the interest rate.

That’s why a 1-year ARM might have a 2.50 percent rate compared with 3.25 percent for a 10-year ARM.

How much risk are you willing to take to get a lower monthly payment? Can your budget handle potential payment increases if interest rates rise?

3. How long do you plan to keep your home?

If you’re in your forever home, then opting for a fixed-rate mortgage locks in your payments for the next 30 years.

If you plan to downsize into a smaller home in a few years, a 5-year ARM will give you a much lower interest rate and monthly payment than a traditional 15- or 30-year fixed rate mortgage.

And if your plans don’t change, you’ll sell and pay off the loan before the ARM resets to a new rate in year six.

For each refinance loan you’re considering, your loan officer can show you how much you’ll pay in total during the time you plan to stay in your home.

Also check to be sure you’ll be there long enough to earn back the money you spend on closing costs.

4. Will you get a tax benefit?

If you itemize your tax deductions, the interest you pay on your mortgage may be deductible.

If you take cash out when you refinance and use the money to pay off credit cards or auto loans, you may also be able to deduct that interest.

Five Gifts To Lower Your Utility Bill

Five Gifts To Lower Your Utility Bill

1. Black & Decker’s Thermal Leak Detector $35

Black & Decker’s Thermal Leak Detector helps you reduce your energy costs by finding temperature differences caused by air leaks or insulation missing from inside your walls.

Use it to identify problem areas around drafty windows and doors and uncover hidden leaks and insulation “soft spots” around electrical outlets, recessed lights and along floor molding.

The Thermal Leak Detector shines a light on your wall. When the wall temperature changes by 1, 5 or 10 degrees F (user adjustable), the light changes to red or blue to indicate a hot or cold spot. Plugging the leaks and drafts in your home can save up to 20 percent off your heating and cooling energy costs.

2. EverSense Touch-Screen Thermostat $399

The EverSense Touch-Screen Thermostat manages your home’s temperature and energy usage based on how far you and other family members are from home. When you head out, the EverSense adjusts the environment in your home. Stuck in traffic? Your EverSense will know and will keep your heating or air conditioning from turning on until you’re close enough to home to make it likely you’ll come back inside.

It also has built-in speakers for streaming your favorite music from your smartphone and a weather application with animated radar.

3. Cree 75-Watt LED bulb $125 (for six)

Cree’s new 75-Watt equivalent LED bulbs, available at Home Depot, use 82 percent less energy than traditional incandescent bulbs, are dimmable and can last up to 20 years if they’re on three hours a day.

Buy enough bulbs to replace all your hard-to-reach high ceiling light fixtures and you might not have to climb up there again until 2034.

The shatterproof glass bulbs look and light like traditional Edison-style bulbs. You can also use the Cree in your outdoor fixtures.

Keep the proof of purchase from the package and your register receipt, you’ll need them to get a refund if the bulb doesn’t last 10 years.

4. Presto 01241 4-Quart Aluminum Pressure Cooker $31

A pressure cooker cooks your food faster so you save energy by not using your stove as long. You can use it to tenderize tough cuts of meat, quickly cook dried beans and make delicious one-pot meals.

A pressure cooker won’t heat up the kitchen, making it a good choice if you live in a tropical climate.

5. Belkin Power Conserve Switch $33 (for six)

This six pack of power switches let you turn off the power to appliances that use standby power, like cable boxes and televisions. The average household spends about $100 a year on standby power so being able to turn off the power with the flick of a switch can save you real money.

Have a daughter that forgets to turn off the flat iron or a son that leaves his game station on? Opt for Bekin’s Conserve Socket F7C009q, which has an automatic shut off you can set for 30 minutes, 3 hours or 6 hours.

There is a catch: Your child will have to push a button on top of the outlet to start power flowing to their device.

Six Ways To Trim Your 2013 Taxes

Six Ways To Trim Your 2013 Taxes

No one wants to pay more taxes than they have to, so use these six strategies to lower the size of the check you send Uncle Sam next April:

1. Pay Bills Early
If you itemize, pay bills early to increase your deductions. Pay your January 2014 mortgage payment and your 2014 property taxes in December 2013. If you’re a joint filer and don’t have $12,200 in qualifying expenses ($6,100 for single filers) to make itemizing deductions worthwhile, don’t prepay your expenses. Save your payments until 2014 when you may be able to take the deductions.

Before you make any early payments, use the Internal Revenue Service’s Alternative Minimum Tax (AMT) Assistant to make sure you’re not subject to AMT. If you’re subject to AMT, you can lose some deductions, so you wouldn’t benefit from paying items early.

2. Make Home Energy-Efficiency Upgrades
Pay for home energy-efficiency upgrades before Dec. 31 to take advantage of a federal tax credit for projects like installing insulation and energy-saving furnaces or air conditioners. This tax credit disappears when 2013 ends, so don’t delay.

3. Recycle When You Remodel 

When you remodel, do it in a way that keeps intact the fixtures and house parts you remove including cabinets, bathtubs, wood floors, windows and doors. Donate them to a salvage store, like Habitat for Humanity’s Restore to earn a tax deduction.

4. Spend FSA Funds On Home Improvements

Have funds left in your Flexible Spending Accounts (FSA)? You can spend them to make medically necessary home improvements, such as a hand rail in your bathroom. Get a letter from your doctor supporting your medical need for the improvements. Many employers have adopted grace periods giving you until March 15, 2014 to spend your FSA funds.

5. Deduct Property Taxes Paid At Closing
If you bought your home in 2013, check your HUD-1 settlement statement (lines 106 and 107) to see if you reimbursed the sellers for property taxes they paid. You won’t get a 1098 from your lender showing those taxes because you paid them at settlement not from your escrow account.

6.  Take The Home Office Deduction
If you have a home office, but haven’t taken the home office deduction because it’s too complicated or you’re worried it would cause you to be audited, go ahead and take it on your 2013 taxes.

Starting this year, you can take a new home office standard deduction of $5 per square foot (up to 300 square feet) if you itemize deductions. You won’t have a home depreciation deduction or later recapture of depreciation for the years you use this simplified option.