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What You Should Know About Radon
Living Wills and Health Care Proxies
What You Should Know About Home Inspectors
Points and Prepaid Interest on Home Mortgages
Title 5
Top 10 Defects Detected During Home Inspections
So How About That Lemon Law?
Consumer Credit
Private Mortgage Insurance (PMI)
What You Should Know About Credit Scores
Know Your Limits
Declaration of Homestead
Taking Advantage of Falling Interest Rates?
Did You Know?

Buying or Selling a Home?
What You Should Know About Radon

A growing number of homebuyers are testing for radon levels before buying
their home. You cannot see, smell or taste Radon gas, but it could be a
problem in your home. Testing is the only way to know if you are at risk of
exposure to excessive levels. Most people don’t find out about the presence
of Radon until they are in the process of selling or buying a home.

Radon gas is a health hazard, causing cancer and other ailments.

Radon is a radioactive gas that comes from the naturally occurring breakdown
of elements in soil, rock and water. It gets into the air you breathe by
seeping up through the ground, or through well water. Your home may trap
radon inside, where it can build up In most cases, excessive radon levels
are easily remedied and the process is not too expensive. It is even
possible to reduce very high levels to acceptable levels.

Radon in the air is measured in "picocuries per liter of air," or "pCi/L."

A test reading over 4 pCi/L is considered excessive. If you are buying or
selling a home, hire a trained contractor to do the testing for you.
However, there are many affordable, "do-it-yourself" radon test kits sold in
hardware and other retail stores. Make sure you use a test kit that meets
Environmental Protection Agency standards. If your test result is 4 pCi/L or
higher you should retest to confirm the results. Consider mitigating the
radon if the average of your first and second test is 4 pCi/L or higher.

There are several ways to reduce radon in your home.

In some cases, radon may be reduced by sealing cracks in floors and walls.
Most often extremely high levels are mitigated using a simple system of
pipes and fans vent and reduce radon. Radon mitigation contractors can use
other methods that may also work in your home. The design of your

home and other factors will determine the right system for the job. The
average cost to mitigate radon is $1,200, although this can range from about
$500 to about $2,500. Lowering high radon levels is a job for a professional
contractor. You should use a contractor who is experienced and qualified to
fix radon problems.
If you are a potential homebuyer and discover elevated levels of radon
during you home inspection, have your attorney negotiate with the seller or
seller’s attorney to correct the problem prior to the closing. If you are
thinking of selling your home, have it inspected prior to accepting any
offers, work with your attorney on how to address any problems. For more
information on Radon visit www.radon.com.

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Living Wills and Health Care Proxies

We often see news stories about families having to go through grueling legal
battles to get doctors to remove a loved one, who is terminally ill,
comatose, or in an unconscious state with no hope of recovery, from life
support. We find many of our clients wanting to plan for such circumstances.

One way to plan for this sort of unfortunate event is through a living will.

A living will gives instructions to your family, or whomever you choose, and
medical professionals regarding the preferred medical treatment you want to
receive and under what circumstances. A living will, however must address
specific circumstances that are likely to occur. The result is a long,
in-depth document written in legalese. This may force the health care
providers to consult their own attorneys for advise on how to act to avoid
liability, before fulfilling the patients requests.

Healthcare Proxies

Under Massachusetts Law, you can appoint a "healthcare agent," who will have
power to make health care decisions for you in the event you unable to make
or communicate those decisions. You may authorize your health care agent to
make all decisions involving your health care that you could make if able to
do so, unless you specifically limit their power in the document. This
includes decisions on providing and withholding life-sustaining treatment.
The law does not allow "suicide or mercy killing" or any "affirmative or
deliberate act to end one's own life," and it does not prevent medical
procedures that your doctor determines is necessary "to provide comfort,
care or pain alleviation."

A health care agent may act when your doctor determines, in writing, that
you lack the capacity to make or to communicate health care decisions. Your
agent's authority will end if your doctor later determines that you have
regained capacity.

You may also name an alternate health care agent, who may act if the first
agent is unwilling or unable to act. The law also allows you to revoke a
health care proxy. A new health care proxy automatically revokes a prior
one. If you name your spouse as a health care agent, a divorce or legal
separation will automatically end that person's authority to act. A health
care proxy should be part of every comprehensive estate plan. Your lawyer
will be able to provide you with more detailed information regarding a
health care proxy; and can assist you in its preparation.

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What You Should Know About Home Inspectors

01/01/2000

After having their offer accepted by a seller most of our homebuyer clients
have the subject property professionally inspected. A through home
inspection will reveal the condition of the property and expose potential
problems with the home.

There are currently no licensing requirements to qualify as a "Home
Inspector."

Anyone, with just a little familiarity with home construction, or with none
at all, can hold themselves out as a "professional" home inspector. Recent
legislation, however, will soon require home inspectors to be licensed by
the State.

Before you hire a home inspector, ask how long the inspector or firm has
been in business, and what professional qualifications the inspector has.
The American Society of Home Inspectors (www.ashi.com) is a trade group for
home inspectors. The ASHI has code of ethics and admissions standards based
on education and experience.

Like any other type of personal service, it is always best to get a referral
from someone you know that has experience with the service provider. Your
Attorney or Realtor may be able to provide you with the name of a quality
home inspector.

Make your offer to purchase conditioned on satisfactory results of the home
inspection.

Avoid entering into a real estate purchase and sale contract prior to your
inspection. Often discrepancies in the home inspection are addressed with
the seller and compensation can be worked out in the final purchase and sale
agreement. Consult an experienced real estate attorney before making any
serious home buying decisions.

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Points and Prepaid Interest on Home Mortgages

The U.S. Commerce Department reported that last year the rate of home
building hit its highest levels in more than 10 years. If you have recently
closed on a home your bank or lender has reported to the IRS, on a Mortgage
Interest Statement (Form 1098), the points and prepaid interest you paid.

This can be good news for many new homeowners. They may be able to deduct
from their taxes points and prepaid interest paid on a home mortgage in the
year paid. There are five basic requirements that a taxpayer must meet. The
deduction can be considered for several different home loans.

1. The settlement statement (HUD-1 Form) must clearly indicate the points or
   interest paid.
2. The points are, as in most cases, figured as a percentage of the mortgage
   principle.
3. The points are paid on a purchase or construction of your primary residence.
4. The mortgage is secured by the primary residence.
5. The points must have been paid by you and not with any loan proceeds.
   

This deduction may also apply to all or a portion of the interest paid on
these types of loans on a primary residence in the year paid:

• Home improvement loans.
• Refinance of a mortgage if a portion is used for home improvement.
• Home Equity Line of Credit if a portion is used for home improvement.
  

There is a good possibility that you may qualify for this type of deduction.
Consult you tax advisor for more details. If you don’t currently have a tax
advisor, call me and I will refer you to an experienced CPA who would be
glad to help you.

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Title 5

The Code of Massachusetts Regulations, Title 5, a part of the Massachusetts
General Laws, controls the installation, replacement, and inspection of
residential septic systems. Because many of my clients, present, past and
future, will have some sort of experience with Title 5, I asked Philip W.
Trumbull, Jr., of Affordable Septic Services in Sutton, to give a brief,
professional overview of the often costly affects of Title 5:

Subsurface Sewerage Disposal Systems
Title 5- Massachusetts General Law

We all know about the strict emissions and safety tests for our cars, the
purpose of which is to protect the environment and public health. Title 5
serves a similar purpose - to protect the environment and public health by
assuring effective treatment of wastewater before it physically returns to
groundwater, to be used elsewhere. It is very important for buyers and
sellers of real estate to be aware of the potential financial price tag of
Title 5 as well as the potential site-related implications.

Any exchange of ownership of real estate served by a subsurface sewerage
disposal or septic system triggers a Title 5 inspection if two or more years
have passed since any prior inspection. The "ideal" Title 5 inspection will
conclude that the septic system, as it exists, is draining correctly, AND
that no component of the septic system is likely to be in the "seasonal high
groundwater". Any component found to be in the groundwater is an automatic
failure of the septic system. In that case, it is usually the seller who is
responsible for the cost of testing, design, and installation of a new
system.

The installation of a complete septic system requires a "perc test" and
"deep hole" tests by a licensed soil evaluator and an engineered drawing by
a Registered Sanitarian or a Professional Engineer. The drawing must be
approved by the local Board of Health and must meet all state and local
Title 5 requirements. Only then can an installer provide an accurate cost
for the septic system.

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Top 10 Defects Detected During Home Inspections

Rick Robinson of Capstone Home Inspections is a professional Home Inspector.
I often recommend his services to my clients. I always encourage my
home-buying clients to have the home they are considering purchasing
professionally inspected. Whether they use Capstone Home Inspections or
another qualified Home Inspector it gives them the opportunity to discover
and address critical defects prior to closing, and can protect them from
making a costly mistake. I asked Rick to tell about the common defects he
encounters.

Knowing some of the usual defects I might uncover during an inspection will
allow you to be a well-informed buyer. Over the years, here's what I've
discovered are the top 10 defects in most homes:

1. Roof leaks due to flashing and valley problems;

2. Water penetration in the basement or crawlspace due to the surface water conditions;

3. Electrical safety issues due to age of home or amateur wiring;

4. Deterioration of the wall material or substrate behind ceramic tile in shower and tub areas;

5. Roof material failure due to age and deterioration;

6. Heating unit and distribution system inequities due to age and workmanship or system compromises;

7. Structural issues due to improper construction and/or alterations, or excessive unbalanced load (i.e. failing concrete block foundation wall);

8. Fire safety issues related to fireplace chimneys;

9. Termite and other wood destroying organisms due to the local environment and conducive conditions; and

10. Plumbing failures and or safety issues due to poor maintenance or work performed by an amateur.

Repair and replacement costs for these items could cost you thousands of
dollars!

Capstone Home Inspections strongly encourages homebuyers to attend the
inspection. In our two and one half to three-hour walking consultation,
you'll learn all about your new home. You will receive a 34 page report that
details information about the condition of the property, how the house
operates, where the main shut-off valves to the utilities are located, and
much more. If defects are discovered during the inspection, I will explain
the possible causes and give possible solutions for their elimination. With
Capstone Home Inspections, you're guaranteed to make a well-informed buying
decision!

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So How About That Lemon Law?

05/01/2000

What does the Lemon Law have to do with real estate? Nothing, but I am asked
about Massachusetts General Law, Chapter 90, §7N, the so-called "Lemon
Laws," quite often.
I thought it would be an interesting, and hopefully, helpful topic. The law
consists of three sections:

The New and Leased Car Lemon Law protects consumers who have serious defects
in their new cars. The law defines a lemon as a "new or leased motor vehicle
that has a defect which substantially impairs the use, market value, or
safety of the vehicle, and which has not been repaired after a reasonable
number of attempts." If your new or leased vehicle has a substantial defect
that still exists or recurs after a reasonable number of repair attempts,
then you may have the right to a refund or replacement vehicle. Keep in mind
that not all car problems are serious enough to qualify under the Lemon Law,
and that the law covers only certain consumer, non-business vehicles.

The Used Vehicle Warranty Law applies to dealer or private party in selling
vehicles in Massachusetts. The law requires dealers to provide consumers
with a written warranty against defects that impair the vehicle’s use or
safety, and requires private parties to disclose any known use or safety
defects. The law provides you with protections and remedies, including
mandatory repairs, refunds, or repurchases. It does not cover all vehicles
or all defects, and not all problems will qualify your vehicle for
repurchase.

The Lemon Aid Law allows you to void or cancel a motor vehicle contract or
sale if the vehicle fails to pass inspection within seven days from the date
of sale AND if the estimated costs of repairs of emissions or safety related
defects exceed 10% of the purchase price. This law applies to both dealer
and private party sales of cars purchased for personal or family use.

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Consumer Credit

Thinking about applying for a mortgage loan? Your credit rating is a key
factor in determining how much home you may qualify for. It is a good habit
to review your credit once a year, and it is especially important before
applying for a loan.

Equifax, Inc. (800) 685-1111
www.equifax.com

Experian (888) 397-3742
www.experian.com

Trans Union Corp. (800) 916-8800
www.transunion.com

You can improve your credit by checking to ensure your credit report
information is accurate. It is also important to pay your bills on time,
keep credit card balances low, and to limit your credit accounts to only
what you need. Older credit accounts should be formally closed, too many
zero balance accounts can count against you.

Include all of your credit information on your loan application. Your lender
will compare your application with your credit report. Do not purposely
exclude accurate information, excluding negative information can be worse
than disclosing it up front.

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Private Mortgage Insurance (PMI)

05/01/2000

What is Private Mortgage Insurance, and how do I get rid of it? These are
two of my all time "frequently asked questions." So I decided to answer them
again here in print. PMI is not some mysterious program designed to trump up
loan payments, and it is not necessarily a difficult concept to understand.

Evidently, studies indicate that if a borrower has less than 20 percent
invested in their house, or put less than 20 percent as a down payment, they
are more likely to default on the loan. Mortgage lenders, therefore, want to
be covered in the event the borrower does default.

Private Mortgage Insurance is an insurance policy, which a borrower pays the
premium on each month with their mortgage payment. The lender is the
beneficiary of the policy, and it protects lenders against loss if the
borrower stops making their mortgage payments. Ideally, it makes it easier
for the lender to agree to give the borrower a loan. PMI makes it possible
for a borrower to purchase a home with as little as a 3 percent down
payment.

Recent legislation states that on loans originated on or after July 29,
1999, a lender must cancel private PMI at the borrower’s request, if the
mortgage balance is 80 percent, or less, of the original value of the house.

Under the same law PMI will be canceled automatically when the mortgage
balance is at 78 percent of the original value of the house. However, the
borrower must be up to date on mortgage payments, and have no other loans on
the house. The lender must also be satisfied that the property value has not
declined.

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What You Should Know About Credit Scores

Mortgage lender studies have examined the relationship between credit scores
and mortgage delinquencies. Nearly half of the borrowers in the study with
scores below 550 were ninety days late with their mortgage payment at least
once during the time of the mortgage. On the other hand, borrowers with
higher scores exhibited excellent payment history. Based on their studies
mortgage lenders put serious weight and consideration on credit scores.
Below is an example of the odds of delinquency based on a given score:

Credit bureau computers now evaluate credit profiles and assign a score to
them, which is used to determine credit worthiness. Commonly referred to as
a "FICO Score," credit scores are determined by past payment history, credit
use, length of credit history, types of credit used and credit inquires.
FICO stands for Fair Isaac & Company, which is the company that developed
the most well known credit scoring system.

If you have a low score, many lenders will consider compensating factors to
increase their likelihood of lending to a particular borrower. Some of those
factors include giving large down payment, having a low debt-to-income
ratio, or having an outstanding history of saving money.

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Know Your Limits

By Christopher C. Mason, Esq.

Automobile insurance can be an expensive pain in the neck. It cost too much
and when you make a claim you have to worry about surcharges and
deductibles. If you are like most people, you only think about car insurance
when you first get the policy and when it's time to pay the bill. We tell
our agent or underwriter that we want "full coverage" and leave the rest up
to them. This can be a costly mistake.

To properly protect you and your family, you must know your insurance
coverage limits. The majority of drivers on the road try to save money by
carrying minimal insurance. If you have the misfortune of being seriously
injured by someone with a basic policy, or even worse, no insurance at all,
you need to have a policy with adequate Underinsurance and Uninsured
coverage.

Don’t be cheap when it comes to insuring your car. Remember, it is not just
the car that is being insured, it’s also the humans inside. When it comes
to, Underinsured, Uninsured and Bodily Injury coverage, ask your agent for
limits of at least $50,000/$100,000 or $100,000/$300,000. Having higher
limits can make a big difference if you have a serious accident with someone
carrying a basic policy.

For example, if you were in an accident and sustained a serious injury that
kept you out of work for an extended period, your claim versus the at-fault
driver could be worth $100,000 or more. If the other driver only has a
$20,000 in coverage, that is the most you can recover from his policy.
However, if you had Underinsured limits of $100,000, you would be entitled
to an additional $80,000 from your own Underinsured coverage.

Increasing your coverage is an inexpensive way to protect your family. It's
like being a good defensive driver and planning for the unexpected. Know
your limits; call your agent or underwriter today.

Christopher C. Mason is an attorney in Worcester, MA with a practice
specializing in Personal Injury Law. When you have a personal injury matter
and think you may need legal assistance contact Chris at (508) 459-6253.

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Declaration of Homestead

02/01/2001

In Massachusetts, an estate of Homestead is an interest in real property
intended to protect the possession and enjoyment of the homeowner or owner’s
surviving spouse and dependent children against the claims of creditors. By
filing a Homestead Declaration with the county registry of deeds, a
homeowner can protect the equity in their primary residence up to $300,000.
Essentially, the Homestead protects the property from forced sale to claim
the equity as a result of civil judgements, creditors’ attachments, and
certain other debts.

In August of 2000, the protection amount of the Homestead Act increased from
$100,000 to $300,000. That means if you have already filed a Homestead on
your primary residence, the Homestead now protects you up $300,000 from
future creditors' attachments. The change of coverage in the Homestead Act
also increased to $300,000 for both the elderly and handicapped, who once
had separate coverage amounts under the Act.

The Homestead still does not offer protection from prior existing debts, and
debts owed for State, Federal, Real Estate taxes, or Court Orders for
support of a spouse or minor children.

If you have not filed a Declaration of Homestead on your primary residence,
you should take advantage of the benefits by filling out the form and
recording it at your county registry of deeds. If you are not sure if you
have already filed one, or if you have any questions, or need help, contact
me.

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Taking Advantage of Falling Interest Rates?

As you may have heard from your local mortgage lender, the Federal Reserve
Board recently cut "interest rates." This may be welcome news for those in
the market for a new home, or for anyone with a high rate on their current
mortgage.

Don’t be too quick to take advantage of those "falling" rates. Locking your
interest rate too soon, if you are a first time buyer, may mean you miss out
on substantial, long-term savings. Refinancing you current mortgage may be a
costly mistake if you don’t take advantage of the right program.

What is the answer, and how do you avoid making the wrong interest rate
decision? This may help:

• Don’t base your decision solely on the rate, you have to consider all of the terms together;

• Work with a mortgage broker or lender that you know and trust;

• Be very wary of on-line lenders, don’t compromise accountability for convenience;

• Don’t write a check to your lender unless you are certain of what it is for;

• If refinancing, make certain you are not currently subject to prepayment penalty;

• Don’t be pressured to sign or close "immediately," allow yourself time to think clearly and seek advice if you need it.

• Consider closing at the end of the month if you have an FHA or VA loan.

Contact me if you have questions about your refinance or mortgage
transaction. If I cannot answer your question, I represent several
professional, reputable and trustworthy mortgage professionals who will have
the answer for me. If you don’t personally know, or have a good relationship
with, a mortgage broker or lender find someone who does and get a referral,
or call me for one. It is always best to work with someone that is
accountable for their service and reputation.

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Did You Know?

That the word REALTOR® designates a real estate sales agent or real estate
broker as an affiliate of the National Association of Realtors, and that not
all sales agents and brokers are REALTORS®. Unlike many real estate agents
who are simply licensed by the state to do business, REALTORS® have taken
additional steps to become members of the local board of REALTORS® and have
agreed to act under and adhere to a strict Code of Ethics.

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