DEAR MR. MYERS: What are the best home-related items to buy in August?
ANSWER: With millions of teenagers heading off to college over the next few weeks, start by thinking about anything that might belong in a dorm room, off-campus apartment or even a home office.
Many retailers are already starting to offer back-to-school discounts of 40 percent or more on items that include computer desks, ergonomic chairs, file cabinets, inexpensive bookshelves and the like. Ditto for futons, linens and storage containers.
Also look for discounts of 50 percent or even more on outdoor patio furniture, as retailers try to clear floor space for autumn-related goods. Most patio items are sold in the spring, as homeowners get ready for the upcoming summer, so home-improvement centers and department stores are anxious to unload their remaining inventory now.
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Barbeque grills are also being discounted, but you’ll likely save even more if you can hold off such a purchase until Labor Day -- the unofficial end of summer, which arrives Sept. 7 -- grows a bit closer.
You can compound your savings if you live in one of the 17 states that have sales-tax “holidays” in August, when no tax is charged on the purchase of certain types of school- and home-related items. Those states include Arkansas (Aug. 1-2), Florida (7-16) Louisiana (7-8), Missouri (7-9), Ohio (7-9), Oklahoma (7-9) and Texas (also Aug. 7-9).
A complete list of states with tax-free holidays and the dates that they occur can be found at www.taxadmin.org. The website is operated by the nonprofit Federation of Tax Administrators.
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REAL ESTATE TRIVIA: Five states -- Alaska, Delaware, Montana, New Hampshire and Oregon -- charge no state sales taxes at all.
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DEAR MR. MYERS: Is it true that the city of Niagara Falls, N.Y., will actually help pay off the student loans of recent college graduates who move there?
ANSWER: In some cases, yes. Although millions of visitors still stream to the picturesque town on the U.S. and Canadian border every year, it’s a little-known fact that its full-time population, currently about 49,000, has been steadily shrinking.
To help stem the exodus and rejuvenate its charming downtown area, local officials are now offering to reimburse recent college grads up to $3,492 each year for two years to repay their student loans. In exchange, the grads agree to live in designated downtown neighborhoods for at least 24 months.
The downtown area has a good mix of affordable apartments and single-family houses, is home to the Park Place Historic District, and is within walking distance to both Niagara Falls State Park and the Niagara Gorge.
The plan, called the Downtown Housing Incentive Program, is open to students who have graduated from an accredited two-year technical school within 24 months of the date the application is filed, or to those who graduated from a four-year school with a bachelor’s degree (or higher) within 36 months of the time the paperwork is completed.
You can get more information about the program by writing to Niagara Falls Community Development, P.O. Box 69, Niagara Falls, NY 14301. Details can also be found online at www.live-nf.com.
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DEAR MR. MYERS: I would like to buy my first home, but I have very little cash. My brother wants to sell his condominium, and is willing to loan me $10,000. I would put the check in my bank account, use it to make a down payment on his condo, and then get a mortgage to finance the rest of the purchase price. The bank would never need to know about the personal loan my brother gives me. Would this be legal?
ANSWER: No. The type of arrangement you are considering is called a “silent second” mortgage, and it’s considered felony home-loan fraud.
When a borrower applies for a mortgage, he or she is required to disclose every dollar of their debt to the lender who takes the loan application. This allows the lender to determine how much more the consumer can borrow.
Failing to list all debt, intentionally or not, is a federal crime punishable by prison time. And even if you initially got the mortgage and closed the sale, the lender could demand that the outstanding balance be paid in a single lump sum if the bank discovered the omission later.
There’s no law that prevents a seller from helping a buyer by providing some of the financing needed to close the transaction, but only if the bank knows about it too.
David W. Myers’ column is distributed by Cowles Syndicate Inc.