Should You Refinance Your Mortgage to Pay Down Student Debt?

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As Bernie Sanders‘ charge toward the White House made clear, student loan debt is a huge problem for millennials, who are struggling to pay off the cost of their education and launch their careers at the same time.  Everyone agrees it’s a big challenge. Not everyone agrees what to do about it.

Now, there’s a solution that will help homeowners saddled with school debt to pay down their student loans by tapping their home equity—while refinancing at a lower mortgage rate. But… some experts question whether it’s financially prudent.

Social Finance Inc. (SoFi), a San Francisco–based online lender, is teaming up with Fannie Mae to offer the exclusive mortgage product, a variation on a “cash-out refinance” mortgage that it estimates could benefit as many as 8.5 million households.

The SoFi–Fannie Mae program is a pilot that is available to homeowners in all U.S. states except Nevada.

The typical homeowner with an outstanding co-signed student loan is carrying a $36,000 balance, according to Experian data. Students and parents who have borrowed money to pay for the rising costs of a college education are typically paying down loans that charge interest rates topping 6%. Meanwhile, the national average for a 30-year fixed-rate mortgage loan is 3.64%, a little over half that rate.

The SoFi Student Loan Payoff ReFi offers a rate that’s about 0.50% lower than that of a traditional cash-out refinance mortgage, says SoFi spokeswoman Laurel Toney. That’s because the lender knows that the cash-out is going directly to the student loan provider, reducing the borrower’s debt and improving her creditworthiness.

Consider a typical young homeowner with a $300,000 home and a $40,000 student loan balance. The interest rates are 3.9% on the mortgage and 6.5% on the student loan. The homeowner has been making payments of $1,271 every month for a few years and now has the mortgage balance down to $200,000.

By refinancing with this program, the homeowner could wipe out her student loan debt and see those house payments drop to $922, saving almost $350 a month.

“People can pay off student loan debt and are left with one loan at the low rates that mortgage borrowers are enjoying in today’s market,” Michael Tannenbaum, a SoFi senior vice president for mortgage, said in a release.

The thing is, as debts go, student loans are pretty good: They offer benefits not available for mortgage loans, including caps on monthly payments based on your income and, in some cases, eventual forgiveness. So erasing your student loan debt while reducing your home equity comes with its own set of risks.

“It’s not innovative; it’s poor financial planning,” says Sylvia M. Guitierrez, a Miami-based mortgage broker and author. “If you stop paying the mortgage, the lender can take your home away. If you fall behind on a student loan, no one is going to take your home, nor your education away.”

Greg McBride, chief financial analyst for Bankrate.com, was equally skeptical.

“In the case of federal student loan debt, it is better to leave it separate so you can benefit from provisions such as deferment, forbearance, income-based repayment, and possible debt forgiveness,” he says. “No other debt obligation is so flexible.”

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Actor Tobey Maguire Is Selling $3M Compound in Santa Monica

Jason LaVeris/FilmMagic

What’s in the Hollywood water that’s making so many celeb couples move to splitsville? We’re still reeling from the Angelina Jolie/Brad Pitt separation, and now actor Tobey Maguire and wife Jennifer Meyer have called it quits.

Of course, it’s the real estate left in the divorce wake that really concerns us. Doesn’t anybody stay together for the condos anymore?

Anyhow, the Maguires have listed their Santa Monica, CA, compound for $3 million, according to the Los Angeles Times. The couple purchased the property only a year ago for $2.7 million.

Front exterior

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The three-building compound sits on a large 8,000-square-foot lot on a tree-lined street in Santa Monica, right up against the city’s border with Los Angeles. Currently there are only 11 single-family homes for sale in the 90403 ZIP Code, and the Maguire house ranks fourth in price, with a $9.25 million spread topping the chart.

The couple’s 2,401-square-foot main house is a dramatically renovated 1920s bungalow with three bedrooms and three baths. There’s also a detached 1,200-square-foot, two-story studio as well as another structure that’s being used now as a home gym.

Two-story detached studio

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Maguire, 42, is best known for his title role in three “Spider-Man” films. He also starred in “The Great Gatsby” and “Seabiscuit.”

• For more photos and details, check out the full listing.
• Homes for sale in Santa Monica, CA
• Learn more about Santa Monica, CA

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The Odd Tale of the $1 Historic Home That No One Wants

Holly Smyth, City of Hercules

You’ve heard it before, but we’ll say it again: The San Francisco Bay Area is a pricey place to live, where even decrepit shacks command six-figure sales.

But what if we told you there’s a Bay Area house for sale—for a mere $1? And what if we added that no one seems to want it? Not yet, anyhow.

Let’s ponder the price for a moment. A single-family house for a dollar. Less than a bottle of beer. Cheaper than a cup of coffee. A steal compared to bus fare.

OK, let us explain.

In the East Bay, the city of Hercules is offering this dollar-home deal. The town purchased this historic home in 2010, also for a measly buck, when it sat on a hill behind the Hercules Powder Works Clubhouse. The city intended to renovate it, preserve it, and keep it as a visitors center.

Better days: Queen Anne Hercules home back in 2005

Holly Smyth, City of Hercules

However, the city ultimately decided it couldn’t devote its limited resources to the project. So it fielded proposals (the original Nov. 1 deadline was extended to Nov. 9) for a lucky soul to hit the housing lottery. The catch: The buyer must remove and renovate it at his own expense.

Did we mention that the buyer needs the wherewithal to put the house back together?

Officially known as Historic Home No. 54 and dubbed the “Queen Anne” for its Victorian style, it was cut in half by the city. The unkind cut was made in order to move the structure to the city’s corporation yard, where it currently sits alongside maintenance equipment and trucks. Perhaps this is not the best technique to move a house, but who are we to say?

Two halves for the price of one … dollar

Holly Smyth, City of Hercules

The original plan was to move it to the site of the city’s Duck Pond Park, just a block away. There, it was supposed to be hooked up to utilities and supplied with information on the area, according to local Realtor® Brian Campbell-Miller, who also sits on the board of the Community and Library Services Commission and is a candidate for City Council.

But the proposed budget didn’t make sense for the city, so it opted to sell the place. For 100 pennies. Sadly, the extremely low sales price has yet to draw in a buyer.

Queen Anne house in its current state

Holly Smyth, City of Hercules

“If we can preserve it, even if it’s not in our own community, that would be the preferred option,” says Hercules Planning Director Holly Smyth, who notes that if no buyer comes forward, the historic home may have to be demolished. It’s become an eyesore to nearby residents, and the pricing ploy is “the last effort to save the building,” she adds.

The cedar structure needs a new roof, windows, electrical, paint and plaster, along with graffiti removal. It has two floors, four bedrooms, and one bathroom. Plus, it includes original details like a two-sided fireplace, stair railings, high ceilings, and both front and back porches.

“It’s a very quaint type of house,” Smyth says.

While the home could be yours for the money between your couch cushions, it’ll take a serious fistful of dollars to figure out how to carefully move it to a new location and turn it into a residence, or whatever else it could be.

Even so, with housing costs showing little sign of a slowdown, a house that’s been cut in two and needs to be hauled away sounds like a sweet deal for a slim dollar. Especially in the Bay Area.

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Vancouver home sales plummet almost 40% as wary buyers wait out rapidly changing market

Nobody is buying in Vancouver because of rapidly changing market conditions, partially brought on by government regulation, say Vancouver realtors who reported Wednesday that sales were off 38.8 per cent in October from a year ago.

There were 2,233 residental sales in the region last month, down from 3,646 a year ago, according to the Real Estate Board of Greater Vancouver. Sales were down 0.9 per cent from September. October sales were 15 per cent below the 10-year average for the month.

“Changing market conditions compounded by a series of government interventions this year have put home buyers and sellers in a holding pattern,” said Dan Morrison, president of the board, in a statement. “Potential buyers and sellers are taking a wait-and-see approach to try and better understand what these changes mean for them.”

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The supply of new listings did drop 3.5 per cent from a year ago and is now off 17 per cent compared to September numbers as people shy away from selling their home in the market in the wake of the new tax.

On July 25, the provincial government announced an additional 15 per cent property tax on homes in metro Vancouver. It took effect Aug. 2, prompting people to rush to beat the tax, but realtors report deals have been falling apart ever since because of a domino effect of people walking away from transactions and others being unable to close deals because they don’t have funds from a previous agreement.

The total number of properties listed for sale in metro Vancouver was 9,143 in October, a 4.5 per cent decrease from a year ago and 2.3 per cent decline from September.

The sales-to-active listings ratio for October 2016 was 24.4 per cent. “Generally, analysts say that
downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months,” the board said in its release.

Morrison said sales are down across all segments but the detached market has seen the largest reduction in home buyer demand. There were 652 detached home sales in October, a 54.6 per cent decline from a year ago.

Prices have remained relatively firm in the detached category with the overall benchmark price $1,545,800, a 28.9 per cent increase from a year ago. From September, prices were down 1.4 per cent.

Despite the drop in detached sales, the board’s composite benchmark price for all residential properties in metro Vancouver was $919,300 in October, a 24.8 per cent increase from a year earlier. From just September, prices have dropped 0.8 per cent.

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6 Surprises About the Obamas’ Private White House Quarters

SAUL LOEB/AFP/Getty Images

Only heaven knows who’ll end up becoming the next U.S. president, but here’s what we can say with certainty: The Obamas are moving out of the White House soon. They’ve already locked in a new house (which is gorgeous), but the question remains: What’s their current home really like? We know they live in the White House, of course, but the first family has never really shown off its private quarters—that is, until now.

Thanks to Architectural Digest, we have the first-ever peek inside the second floor of the White House, where President Barack Obama, first lady Michelle, their teenage daughters Malia and Sasha, and (last but not least) Portuguese water dogs Bo and Sunny have been living for the past eight years. And we’ve gotta say, their home décor choices are full of surprises. Here are some of the biggest:

Fact No. 1: The Obamas paid for it themselves

New presidents are traditionally allotted $100,000 to decorate the White House residence however they please, but the Obamas turned down this handout and spent their own money. So nice of them to not run up the government’s bill, don’t you think?

The Yellow Oval Room

Architectural Digest

Fact No. 2: Malia and Sasha’s rooms were furnished first

For a mom, even a first lady mom, kids always come first, even on the decor front.

“The No. 1 priority for the first lady was getting Malia’s and Sasha’s rooms and her mother’s room set up,” first lady senior adviser Melissa Winter told Architectural Digest. “The most important thing was ensuring the comfort and happiness of her family.”

The West Hall Sitting Room

Architectural Digest

Fact No. 3: The artwork is way out there

Michelle made some pioneering art selections, according to her interior designer, Michael Smith. “We selected artists and designers who would never have appeared in the White House before,” he says. “Mrs. Obama often talks about bringing new voices into the national conversation, and that idea informed many of the decisions we made.” (More on one noteworthy newcomer next.)

The White House West Hall

Architectural Digest

Fact No. 4: The historic dining room got a big-time modern overhaul

The Obamas made a slew of changes to the Old Family Dining Room. It’s a nice mix of old and new. The old: a 19th-century mahogany table and a sideboard once owned by statesman Daniel Webster. The new: a handful of American abstract works, including Josef Albers’ nested squares, a 1998 pop art piece by Robert Rauschenberg, and a 1966 painting by Alma Thomas—the first African-American female artist represented in the White House (pictured below, right).

The Old Family Dining Room

Architectural Digest

Fact No. 5: The master bedroom is a real oasis

After a long day running the country, the president retires with his wife to a master bedroom that’s serene and surprisingly monochromatic, graced with an antique canopy bed topped with Italian linen, family photos on footed tables, stacks of books, and a nocturne painting by James Abbott McNeill Whistler hanging over the fireplace.

Smith notes, “This is their sanctuary—private, elegant, and calm. You really want to make sure that the president of the United States gets a good night’s sleep.” Indeed we do!

The Obamas’ bedroom

Architectural Digest

Fact No. 6: It really did feel like home

Think it’s hard to truly kick back and feel at home in the White House? Not according to the first lady.

“Because of Michael Smith, the private residence of the White House has not only reflected our taste but also upheld the proud history of this building,” Michelle says. “Above all, it has truly felt like a home for our family.”

Awwww.

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Fashion Icon Calvin Klein Snips the Price of His Fabulous Florida Estate

Astrid Stawiarz/Getty Images; realtor.com

Fashion designer Calvin Klein spent four years remodeling a Miami Beach “waterfront sanctuary” with his trademark exquisite taste, and then found a $25 million pied-à-terre in the Hollywood Hills that he couldn’t resist. So, it was out with the old, in with the new, and he put his Miami property on the market for $16 million in May 2015.

It now appears Klein has become more serious about a Florida sale—he just reduced the asking price of his Miami mansion to $15 million last week.

At $2,585 per square foot, the 5,800-square-foot house is still the most expensive property in the neighborhood, but the quality, taste, and location are unrivaled anywhere else in the world, according to listing agent Pablo Alfaro of Douglas Elliman.

“It’s one of the best in Miami,” he says, noting that Klein brought craftsmen from Europe to work on it. Klein put in new landscaping and remodeled and refurnished the home, which was originally built in 1929.

Living room

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The home’s minimalist beach chic style is a welcome respite from the more ornate homes of the rich and famous in Florida. But if buyers want to retain the taste and purchase the property in turnkey condition, they’ll have to negotiate the price of the furniture into the sale price. Some of the furnishings and decor are antiques, and some of the pieces were designed by Axel Vervoordt.

Courtyard

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The home has a private dock and an infinity pool overlooking 113 feet of open bay. There are five en suite bedrooms and two half-baths.The interior’s open floor plan, water features, and bamboo were designed to create a feeling of Zen.

Zen bathroom

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Klein is now ensconced in his new 9,300-square-foot home with gorgeous views in the coveted Bird Streets of Los Angeles. The property was a spec home listed for just below $30,000,000. Klein ended up paying $25,000,000 for it, saying he was excited about buying a “blank canvas” to design anew. Once a designer, always a designer.

• For more photos and details, check out the full listing.
• Homes for sale in Miami Beach, FL
• Learn more about Miami Beach, FL

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How to Warm Up a Midcentury Bedroom

Joe Schmelzer

Doron Silverman was delighted when he got the keys to Hurley House, a 1958 Los Angeles home designed by the pioneering Swedish architect Greta Magnusson Grossman.

“We fell in love with the Midcentury sense of style and then found this property that had not been changed very much,” says Mr. Silverman of his roughly 2,700-square-foot, four-bedroom home.

There was just one drawback: At roughly 300 square feet, the master bedroom seemed rather small to the couple.

“It’s typical Midcentury design not to have big rooms,” says Mr. Silverman, the 41-year-old chief executive of Bedaga, a mattress-production startup based in Los Angeles.

To make the space more comfortable, Mr. Silverman and his wife, Samantha, a 36-year-old singer/songwriter, chose to outfit the room with “glamorous” elements.

“We’ve kept the design very contained in the rest of the house, but the bedroom is a sexy retreat,” he says. “It’s meant to be really fun.”

1. Wallpaper

Doron Silverman picked the Robert Crowder stone-inspired wallpaper from L.A. design store Harbinger to pay homage to his favorite piece in the house, an original travertine wall in the living room. Price: $1,050 at $210/panel

2. Bed

The bed comes with a brass frame and cashmere headboard from Loro Piana, the Italian luxury label. Mr. Silverman chose to have the seams on the cashmere revealed, a riff on a handbag he had seen with exposed seams. Price: $14,500

3. Rug

Mr. Silverman discovered the Mohebban Milano wool and silk rug while roaming the Maison et Objet design fair in Paris last year. “I saw the patterns and colors and convinced them to sell me the very one they were displaying,” he says. Price: $2,500

4. Nightstands

The gray oak nightstands are from interior designer Natasha Baradaran, who works with Mr. Silverman. Each has a jewelry-like finish on the front that he says “adds dimension while not being too loud.” Price: $9,100 each

5. Lamps

The two bronze and ribbed-glass lamps on the nightstand are made by Home House Co-Op, of Maine Design of L.A. “They have interesting details on them if you look closely,” Mr. Silverman says. Price: $3,900 each

6. Daybed

The daybed was produced by Mr. Silverman and crafted from black walnut and bronze with sombrero boucle fabric. It was the first Midcentury-design piece he owned and the sole remnant of his previous bedroom. Price: $6,500

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