Black and White

I rarely create and publish black and white photographs. I enjoy them, but I usually prefer to recreate my personal experience which is greatly influenced by color. Recently I submitted a color photograph of the Tonto National Monument Lower Cliff Dwelling to iStockphoto that was rejected for dull flat colors. That area of the desert has dull flat colors, which aren't very suitable for stock photography, so I wasn't surprised. However, the national monument is very interesting. So, I converted the photograph to black and white and that version was accepted at iStockphoto.

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Surviving the Mortgage Market Crash

Recently my husband and I purchased a home. We were trying to get a jumbo mortgage on stated income while underwriting requirements were literally changing hourly in the middle of the mortgage market crash. It took us six tries to get a mortgage. Our mortgage brokers and real estate agents were amazed that we stuck through it and managed to purchase the home. Requirements have stabilized somewhat, but the credit crunch is still with us and probably will be for quite some time. Here are some of the things that I have learned in the process of buying a home during the mortgage market crash.

Considerations Before Looking

Before you try to buy a house, take a few things into consideration. How important is buying this house now? We had an overriding need to take care of my mother-in-law, which drove us to buy a bigger house where we could house ourselves, my mother-in-law, her sister and our business. How are you going to come up with the down payment? Are you willing to empty brokerage and retirement accounts, if you have them, to invest in real estate? Do you need to sell an existing home to afford a different one? This is a buyer's market if you can afford to be a buyer. If you're going to be living in the house for a long time (I would consider at least 5 years.), the long term risk of the current drop in housing prices is reduced and may turn into a good investment if and when the market turns around.

Jumbo Loans

Any loan over $417,000 is considered a jumbo loan because that is the conforming loan limit for single homes and condos set by Fannie Mae and Freddie Mac who purchase loans from mortgage originator, including mortgage brokers and banks. If your loan is a jumbo loan, the company that gave you the loan will have a much harder time selling it, putting the company at higher risk and decreasing its cash supply. Jumbo loans typically have higher interest rates and are harder to get because of this increased risk. Most lending institutions have stopped offering jumbo loans or have tightened their requirements on borrowers for jumbo loans. The conforming loan limit is set each year in January. Because $417,000 is now less than what people need to buy a starter home in many markets and jumbo loans are being offered by fewer companies, the limit may be raised next year, to say $500,000, to help alleviate the credit crunch.

Stated Income

Because much of our income comes from our small business which has undergone changes in the last year, we initially tried to get a stated income loan which does not require proof of income. When we applied for stated income loans, we were trapped in a catch 22. My husband left his full time job last year to do full time consulting, which he had been doing part time for more than 10 years. The financial institutions would not give us credit for his last year's income because he was no longer at that job. Also, they would not give us credit for the income we had so far this year in the business, even though we were willing to show deposit records to prove it, because we had not yet filed our taxes for this year. Even though we knew we could afford the house we were buying and our mortgage broker agreed, we couldn't prove our income to the underwriters' satisfaction. Unfortunately, stated income loans have been abused. Many people lied about their income leading to stated income loans being known as "liars loans" and adding to the recent increased rate of foreclosures. Now, many institutions are no longer offering stated income loans, or they say they are, but the requirements have been tightened so much that they are essentially full doc loans. Ultimately, we got around this by getting a mortgage with no income verification requirements. We put so much down on the house that only the equity ratio of the loan was considered for approving the loan. Unfortunately, many people who legitimately benefit from stated income loans, for example, many small business owners, cannot get them any more.

Tips

There a few of things you can do to increase your chances of being able to buy the house you want (as opposed to shopping for a cheaper house or renting).

• Work with an experienced mortgage broker who can and will explain the terms of all of the mortgage options that may be available to you. You may be able to get lower fees by going to a particular institution, but it is very difficult to know and understand all of the mortgage options that are available and negotiate the paperwork required as someone who does not work with a large number of financial institutions regularly. We've been very happy working with Kimberly Norris of Fairway Independent Mortgage (480-496-2879).
• Plan to spend a lot of time to gather the documentation required for a mortgage. Each time we applied for another mortgage I spent about a week getting together the documentation. Even though it was similar each time, I had to keep getting the latest statements and the underwriters asked for slightly different documentation for each loan.
  
• Try to get your loan amount under $417,000. We used nearly all of our savings to get our mortgage under $417,000. If you're putting more cash into your home than you would like initially and wind up with a very substantial down payment, you may be able to get access to some of the cash as a home equity loan or line of credit once you get into your new home.
  
• If you can't get the loan under $417,000, you may be able to break the mortgage up into a first mortgage and a second mortgage with the first at $417,000 and the rest, minus your down payment, in the second. Breaking up the risk across institutions sometimes helps get your mortgage(s) funded.
  
• Expect to need a large down payment to buy a house. The days of 20% down being the gold standard are back. There are some innovative programs to help people with down payments, for example, AmeriDream's Down Payment Gift Program, but you will probably be expected to come up with a chunk of change on your own. For our mortgage applications, we were expected to contribute at least 5% of the total purchase price from our own accounts in cash.
  
• Maintain an excellent credit rating. 700 is good, but 720 or higher is even better. The lower your credit score, the harder it will be to get institutions to lend you money and the higher the interest you will pay if you do manage to get a mortgage.
• Claim as much income and as few deductions as possible on your taxes. This is counter intuitive for many people who have been minimizing their taxes by claiming as many deductions as possible for many years. However, when you apply for a mortgage, financial institutions typically take into account the income that you have after deductions for at least the last two years. It may be worth paying a few thousand dollars extra in taxes to be able to get a mortgage for the house you want to buy.

Hopefully, what I've learned from my experience in the mortgage market crash can help someone else have a little easier time. I look forward to comments and questions.

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Which DSLR should you buy?

As an avid photographer, I'm often asked what camera someone should buy when they are considering upgrading to a DSLR (Digital Single Lens Reflex) camera, especially around this time of year when most people are shopping for gifts. I'll start with a general discussion on the differences between film and digital photography, then discuss specific cameras, lenses and accessories. Most of the equipment that I recommend and use can be found here.

What are the differences between film and digital photography?

With a film camera you will typically follow this process:

1. Buy the film.
2. Put the film in your camera.
3. Expose the film.
4. Take the film for processing.
5. View your prints when you get them back and throw out the ones you don't want.
6. Distribute prints of your photographs.

In digital photography, you have more choices and responsibilities in the process:

1. Purchase storage media.
2. Put the storage media in your camera.
3. Take the photographs.
4. Review the photographs in the camera and delete any you don't want.
5. Download photographs to a hard drive.
6. Edit the photographs.
7. Delete files from the media.
8. Upload the photographs.
9. Print the photographs.
10. Distribute the photographs by letting your friends and family know where to see the photographs or sending them email or printed copies.

Issues to consider in digital photography:

• Digital photography saves money by substituting digital media which can be reused for film, but you will need hard drive space and/or online network storage to save your files before you delete them from the storage media.
• What format are you going to shoot in? RAW provides all of the native resolution of a photograph, but generates a huge file and requires photo editing software to read and convert the image to a distributable format. TIFF is a lossless compression format that is generally viewable, but generates a large file. JPEG provides excellent compression and is a standard for web display, but it is a lossy format. Every time you save a JPEG, you lose information in the image and introduce artifacts. If you're not editing your photographs, then go ahead and shoot in JPEG. I usually shoot in RAW+small JPEG which provides the full resolution and an easy preview. I edit from the RAW file, then save to a JPEG when I'm done and upload that to the web.
• Editing photographs is an art. While some simple interfaces exist for doing basic editing such as red eye removal and cropping, more complex changes generally require investment in photo editing software and training in using that software. Photoshop is the gold standard for photo editing. If you want to get a full version of Photoshop, I recommend buying an earlier version of Photoshop, then upgrading to save money, especially if you want the extended version which provides support for 3D and motion based content and image analysis.
• Hard drives fail and burned CDs fail in 3 to 5 years on average. Backup your digital photographs in a way that will protect them. For example, use a RAIDed hard drive configuration and/or a reputable online photo service that will not delete your photos if you have not paid them, e.g., Flickr or Picasa.
• Sending photographs embedded in email can be dangerous or rude. Many people have email accounts that only allow so many or a so large a size attachments. Also, many people will not open attachments because they may contain viruses. If you want to distribute your photographs to friends online, upload them to a reputable service, then send them an email to go look at your photo album or set.
• Decide how public you want your images to be and actively manage your privacy. Do you want anyone to be able to see your family, including your children online? I use Flickr and manage my settings so that any photographs with people in them can only be seen by my Friends and Family in Flickr, unless I've gotten permission from the people in the photo to make it public.

What DSLR camera should I buy?

I only have experience with Canon DSLRs, so that's the camera brand that I can talk to in detail. If you're new to SLRs or you're looking to stay under $1000 in your initial investment, the best current choice of camera is the Canon EOS Digital Rebel XTi. It has great features, including 10.1 MP, availability of shooting in RAW+JPEG, and compatibility with Canon EF and EF-S lenses, at a reasonable price. EF lenses are compatible with all 35mm film and full frame digital Canon EOS cameras. EF-S lenses are compatible with the less than full frame Canon DSLRs. With the Rebel, you can save on the camera initially and invest in a better EF lens which will be compatible if you decide to upgrade your camera body later. I use a Canon EOS 20D which is a more rugged pro/am 8.2 MP camera with more advanced features, like shutter speeds to 1/8000 of a second and additional focus points. It is no longer produced by Canon, but can be found used or in back stock. The current production version of my camera is the Canon 40D. If you're looking for the ultimate camera and would rather have a camera than a car, you might consider one of the professional models like the Canon EOS 1DS Mark II. The higher models provide higher resolution, more focus points and more shots before saving to compact flash, among many other advanced features.

Which lens should I buy?

The most important determinant of the quality of your photographs in your camera system (besides the photographer) is the lens. Lenses my be fixed, providing only one focal length, or variable. Fixed lenses generally have better quality for the price because you're not paying for a more sophisticated focusing mechanism that must adjust for a varying focal length, but they provide no zoom. So, you have to buy more lenses and change lenses more often, leading to difficulties in capturing images and needing to clean the sensor more often. Most amateur photographers use zoom lenses to reduce the overall cost of ownership and increase ease of use.

The range of focal length of a lens determines what subjects it will photograph best. Small focal length lenses are wide angle lenses. They are generally best suited for portraits and landscapes, but introduce strong perspective distortion up close. 35mm lenses give you a "natural" perspective, which appears as if you were looking at it directly. Long focal length lenses are telephoto lenses. They are best for photographing details or objects at a distance, but they crop what you can see in the image as you zoom in. If you are photographing sports or nature you will probably want a telephoto lens with a focal length of at least 100mm, preferably 200mm or greater.

The lower the f-stop of the lens, or the brighter the lens, the lower the level of light in which it will be able to capture detail without a flash. Introductory lenses are usually in the f/4 to f/6 range. Lenses good for low light conditions are generally in the f/1.2 to f/2.8 range. The brighter the lens, the more expensive it will be.

If you're on a budget, you may want to start with a kit which includes a lens with the camera, like the Canon EOS Digital Rebel XTi kit which includes an 18-55mm lens. The 20D kit that I purchased included the Canon 17-85mm EF-S lens which I was happy with until I upgraded to Canon L lenses. The Canon L lenses have the highest quality optics. The lens I keep on my camera for general use is the Canon EF 17-40mm f/4L lens. My favorite lens is the Canon EF 70-200mm f/2.8L lens. If you are interested in improving the quality of your photographs at a detail level, buy the best lens that you can afford.

What accessories should I buy for my camera?

Whenever you buy a camera, you will need some basic accessories to make it easier to use and improve your photographs.

Buy enough camera storage media and hard drive space to support your shooting volume. If you're uploading JPEGs directly from your storage media, you don't need to worry about extensive home data storage. If you're editing your photographs and want to keep the RAW or photo editing software originals, you'll need to have hard drive space to support it at home. The most I've used in a day with my 20D is 10 GB. I generally carry an 8 GB and a 4 GB compact flash cards. I have a 1 TB Buffalo Terastation for RAIDed home data storage and a Pro Flickr account that allows unlimited uploading of JPEGs up to 10 MB in size for online storage.

Consider buying a flash. An adjustable flash that mounts on or off the camera will allow you many more lighting options than the flash that is built into the camera.

Consider buying a tripod. One of the biggest difference between amateur and professional photography is the use of a tripod. Using a tripod helps control unwanted motion blur and is indispensable for larger lenses. Buy a tripod in the lightest material you can afford for portability. The lighter the tripod, the more likely that you'll use it regularly. I use a carbon fiber Manfrotto tripod. You may also consider a monopod, which is useful when you are not allowed to or can't use a tripod due to space restrictions. You can also use the tripod collapsed to one leg instead of a monopod.

There are many different heads available for tripods. Features to look for in tripod heads include quick release and monoball. Make sure that the head that you choose is strong enough to support the weight of the camera equipment that you will be supporting with it, including the camera, flash and any other accessories. I use a monoball Arca Swiss head. I purchased extra plates for my large lenses, so that I can do a quick change of lenses and remount using the lens mount on my larger lenses without having to transfer the plate from my camera to the lens mount.

You may want to consider buying a camera bag or backpack. If I'm not taking a lot of equipment with me for the day, I put my equipment in to my large purse. For a serious day of shooting I use my Targus backpack that is specifically designed with padding that is adjustable for different lenses. It also has a pocket and clips for securing a monopod or tripod.

This blog entry answers some basic questions about what I consider when purchasing camera
equipment. I hope it helps guide you in selecting equipment to increase your enjoyment of photography. I look forward to any comments and questions about purchasing basic DSLR equipment.

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