Archive for the 'Everything Else' Category

Griffith Observatory: One of LA’s most distinguished buildings – Inside and out.

Recently my good friend John Evarts and I visited the Griffith Park Observatory atop the Hollywood Hills. 

If you’ve never been here, this place is an absolute must for any LA tourist or resident

The views from the observatory are abosultely fabulous and you can see clear across the LA basin from downtown to Catalina Island.   (I took this picture from the back of the observatory)

Los Angeles Skyline

Realizing what a gem this facility is for the city of L.A,  John and I decided to co-author a blog featuring the Observatory as one of LA’s most distinguished buildings.  You can read John’s Blog about the exterior of this building and the 5 year re-modeling project here

In this blog, I will give you the .05 cent tour of the inside of the facility, but do yourself a favor and check out this place next time your in LA.

The Obervatory has 2 floors full of exhibits and astronomical objects that are arranged into several theme featured halls.  One of my favorites was the Gunther Depths of Space this hall focuses on the night sky, our solar system, the milky way and galaxies beyond.   I could spend all day in this one part of the museum reading about all of the exhibits and the constellations that we see in the night sky.  Did you know that Polaris, aka the North Star appears stationary in the night sky?  All the other stars appear to rotate around Polaris?  Why is this? And how can you easily spot Polaris — contrary to popular belief its not the brightest star in the sky, in fact its relatively faint.  You’ll find the answer to these questions in this hall.

There are many other halls downstairs that feature specific astronomical topics, its too much for me to write about here, but you will find “the hall of the eye”, “the hall of the sky”, “the cosmic connection” and many others.

Downstairs you will also find asteroids and meteorites that have penetrated our atmosphere and have been collected over the years.  Some of these shooting stars have some pretty fascinating stories behind them, like the one that struck a lady in Alabama and nearly killed her.  The meteor grazed her leg and burned a streak into her leg.  Thank your lucky stars!!!

Griffith Observatory

Ok lets get into the really cool stuff, located on the upper level.  The main floor has 3 distingushing domes, the center of which is the planetarium which is the focal point of the entire museum. 

Inside this dome you can sit back in recliner seats and stare up into the center dome, and watch a presenation called “Centered in the Universe.” The star projector in the center of the room will project the night sky on the dome and for the next 30 minutes, you will get the best tour of the night sky you’ve ever seen.  It’s abosultely awesome.  You’ll think you’re outdoors looking at the real sky.   You’ll learn about the early days of astronomy, the constellations, and about key discoveries that have enabled us to better understanding the depths of space.  If you think that Planet Earth is amazing, this show will give you a whole new appreciation for how small we really are and how enormous our solar sytem and galaxy are.  Its more than you can wrap your brain around..

The center dome is flanked on either side by two other domes that each have specialized high power telescopes that are available to the public for free viewing of the sky.  The west dome has a solar telescope that allows you to see solar activitiy such as solar flares and sun spots on the Sun.  The east dome is used primarly at night and is capable of focusing on any celestial event that is visible from the LA area.   This telescope is open until 10pm and you can see the moon, the stars, nebula’s, galaxies and more.  You’ll have to check with the observatory to find out what this telescope is focused on, for any given night.

If you have young kids that are curious about the night sky, bring them here.  While, most of the displays are geared to teach children of all ages, younger kids might find it boring, because there is a lot of reading to do at each exhibit.  Keep in mind, this isn’t a Disneyland exhibit.  Its a real working musuem, so expect to take your time learning and thinking.

Again if you’ve never been here, please check it out next time you visit LA.  7 Milliion guests have visited the observatory since its opening in 1935 so there really is something here for everyone.

If you’ve already been here, let me know what your favorite part of the musuem is?  I’d love to hear your comments on this Shining Star located in the Hollywood Hills.

Under the Mortgage Microscope: Prepayment penalties understood.

Despite consumers dislike for prepayment penalties lenders often make them a requirement of the loan.  Nobody wants one; nobody likes them.  So why can’t we just get rid of them altogether?  My rule of thumb is to generally avoid prepayment penalties when possible, but is there ever a time when it’s advisable to accept a prepayment penalty? 

To answer this, we need to look at the big picture so that we can better understand the role of prepayment penalties in a loan.  Sure, prepayment penalties exist to protect the lenders profit margin on a loan, but a closer look reveals that the driving force behind prepayment penalties is the need to lend in a marketplace that would otherwise not exist.

Say for example a lender has $25M to lend.  They can choose to lend that money to borrowers with strong credit scores and make a profit margin of 2-3%, or they can choose to lend this money to higher risk – low credit score borrowers and make higher profit margins of say 4-5%. 

Herein lays the reason for the prepayment penalty.  Without a mechanism to tie a borrower to a loan for some pre-determined period of time, the lender bears the risk of losing the intended profit margin which is the driving force behind their willingness to provide loans to individuals with less than perfect credit histories.   In other words, why lend money to higher risk borrowers if there’s no additional gain. 

It’s for this reason that sub-prime loans contain a pre-payment penalty.  However the penalties are not exclusive to the sub-prime borrower.  Often you will find A paper borrowers that have a penalty.  In these cases it can be for other reasons.  Remember, just because a borrower has “A” grade credit it doesn’t mean they qualify for an “A” grade loan, many other factors are in play.  The type of income documentation provided, and the loan to value ratio, are some of the reasons why an “A” borrower may have a loan that requires to have a prepayment penalty.

So Should I accept a prepayment penalty?

No.  Avoid prepayment penalties any time that you can.  Remember, the penalties are there for the lenders sake not yours.  Sometimes you will get a lower interest rate for accepting a penalty, but this rate reduction needs to be weighed heavily against your ability to get out of this loan if necessary.  Most people can reasonably forecast their lives for the next year and a 1 year prepayment penalty is pretty safe bet.  However, anything longer than a year has too much uncertainty.  Take into consideration that a family hardship, the loss of income, or any unexpected reason requiring you to sell or refinance the property will likely cost you thousands of dollars if you trigger a prepayment clause.  Therefore the savings associated with a rate reduction will be eaten away by the penalty should you trigger it.

If your credit score and borrowing situation is such that you can’t get around a prepayment penalty, then you have no choice but to accept it. However, before you accept a penalty, you need to be certain that you understand it and can live with the loan as it is for the duration of the penalty period.  

Generally, there are 2 types of prepayment penalties, Hard and Soft and they can range from 1-5 years in length.   

A hard penalty means that if you refinance or sell the property, the penalty will be invoked and you will have to pay the lender..

A soft prepayment penalty means that the borrower can sell the property without penalty however if they try to refinance the property, the penalty will apply.

So needless to say prepayment penalties will always exist as long as there is a market for lending to anyone other than the perfect borrower.