SImple Real Estate Definitions: Escrow Account

An escrow account is a designated savings account into which funds get deposited for a specific purpose.

With respect to real estate and home loans, escrow accounts are used to pay real estate tax bills and homeowners insurance payments.

Escrow accounts are managed and disbursed by lenders.

When a homeowner "escrows" his mortgage, along with his scheduled monthly mortgage payment, he must also send an additional payment to the lender equal to 1/12 of the home's annual real estate tax bill plus 1/12 of the annual homeowners insurance bill.

By sending a pro rata portion of the tax and insurance bill each month, the homeowner's escrow account will always, in theory, have enough funds to make payments in full as tax bills and insurance premiums come due.

Philadelphia's Magic Garden Dazzles South Street

I had the pleasure of attending the kickoff of a new local charity called

Image by reeltor99 via Flickr

Making a Progressive Philadelphia (MAPP) - the name is quite a mouthful, but its acronym is also the last name of the founder Brett Mapp. The organization wants to raise money so that they may give micro-grants to worthy organizations in the city that have financial needs too small to be addressed by most grant giving organizations. I don;t know Brett well, and was there because I was invited by my social media buddy Gloria Bell who is very active with non-profits in Philadelphia. Though I am intrgued by the organization's stated goal, and they seem like really nice people, I really don't know much about them, so you can check out the organization later if you wish to get involved with them.

What I will say though is that Brett and company really know how to choose a venue! Their event was held at Philadelphia's Magic Garden on South Street, a building and a lot that has been converted to an amazing work of art. The artist is Isaiah Zagar a 7- year old artist who has this to say about his work;

It is an impossible place, but strangely you can visit it and smile at that which you knew existed somewhere. Now you know that place is in Philadelphia, and you knew it all along, didn't you?

I have to admit , I didn't know that such a place existed, but I certainly hoped it did...and I'm really pleased that it does exist here so that we can all experience his vision,

Is It Better to Take a 15 Year Mortgage?

For today's home buyers and homeowners that can manage the higher monthly payments, 15-year fixed rate mortgage rates look attractive as compared to comparable 30-year products.

The 15-year/30-year interest rate spread is near its 5-year high. That means that the cost of money during the term of your loan is much much lower if you choose a 15 year term.

Despite lower rates, however, homeowners opting for a 15-year fixed mortgage should be prepared for its higher monthly payments. This is because the principal balance of a 15-year fixed is repaid in half the years as with a standard, 30-year amortizing product.

As compared to 30-year terms, 15-year products repay 3 times as much principal each month, which accounts for the greatest part of the payment difference.

Versus a 30-year, 15-year fixed mortgages have a few downsides worth noting. The first is that, because 15-year mortgages are heavy on principal and light on interest, homeowners who itemize tax returns may have to claim a smaller mortgage interest tax deduction at tax time.

Another negative is that the sheer size of the payment. If you run into fiscal trouble down the road, the only way to reduce the monthly obligation is to refinance into a 30-year product and that costs money to do.

In other words, be sure you can manage the payments over the long-term before you opt for a 15-year term. If you can manage it, though, the rewards are tangible. Building equity in your property faster can have a number of benefits, including making a move up easier later on.

At today's rates, a 15-year fixed and 30-year fixed costs $230 extra per $100,000 borrowed.

Philadelphia Social Media Bowls Over Charity

I don't usually write about social media on this blog. I reserve it for my Blog at the Social Media Marketing Institute, or BuzzBuilderz, or REreflections. But people in Philadelphia are working hard to make things in our city better and they're using social media accomplish these changes.

Local Social Media personalities like Gloria Bell of Red Stapler Consulting worked hard to hold a local event at Lucky Strike Lanes on Chestnut Street called Twestival Philadelphia. This event was only one of a number of events held around the world , all to benefit local charities.

A Twestival or Twitter-Festival is a global series of events organized by volunteers around the world under short timescales, which bring people offline for a great cause. Twestival is run 100% by volunteers and independently from any not-for-profit; although the organizing teams do work closely to outline an achievable and measurable fundraising target.

In Philadelphia volunteers sold tickets and sponsors donated raffle prizes all to benefit Gift of Life Family House, The house is a non-profit organization that provides temporary lodging and supportive services to transplant patients and families seeking transplant treatment at Philadelphia transplant centers. During the event members of the organization, and even individuals who had received the gift of transplants participated together to make our community stronger.

As of last week local Twestivals had raised $233,960 and that does not include 40+ cities whose tallies are still not collected. Congratulations to all of those who donated time or prizes for all of these worthy causes, who proved that twitter, and facebook, and the people who populate them are more then a passing fad, and that social media has a place in the communities of the city of brotherly love.

I can't Blog about Hank Baskett

Image by reeltor99 via Flickr

In a classroom today I was speaking with Kim Wood, who told me that she had just completed a post on her blog about Hank Baskett leaving Philadelphia for the Colts.

During our class on Social Media, I needed to write a blog post and was going to use that when the strict, and authoritarian Ms. Wood said I was not allowed.

Therefore this post is now over.

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