Financially Responsible Ways to Pay Down Your Mortgage

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Learn about smart ways to pay down your mortgage in a way that benefits you the most.

So you're interested in a mortgage where you have lower interest rates, an earlier payoff date, and smaller monthly payments. Good news: There are a number of smart and financially sound ways this can be accomplished, according to national mortgage expert, Joe Gross, who launched the "Your Home - Your Future" radio show that talks about various mortgage topics.

"Yes, there are several good options available that can assist you in paying off your mortgage in a responsible manner," says Gross. "But you want to make sure that you choose one that will best fit your particular financial situation."

And although everyone's needs and financial situations differ, there are some facts about paying off your mortgage that apply across the board.

Check out our list of five smart ways to pay off your mortgage, along with reasons why.

Smart Tip #1: Consider if Refinancing is Right for You  
Refinancing could be a smart way to help pay off your mortgage, since some of the benefits of refinancing might include a lower interest rate, which means you could afford to pay off more of your loan in less amount of time.

And Gross says now is a smart time to refinance because interest rates are at a historical low.
Just how low? According to Mortgage News Daily, an organization that provides housing news and analysis, rates were at 3.62 percent as of March 19, 2013.

"If a person is currently paying 6 percent interest on their mortgage, they could get their interest lowered to 4 or 3.5 percent through refinancing," explains Gross. "As a result, their monthly payments will automatically be lower, and they will save money."

However, there are a few things you should consider before going through with a refinance, says Gross.

"What you need to look at is how much money you will save on a refinance, and based on that, make the decision," he says.

You'll also want to consider refinancing closing costs, which typically will run you about 3 to 6 percent of your amount loan, according to the Federal Reserve's mortgage refinancing guide. And if you can't recoup those costs with the money you save through refinancing, then it's probably not worth it.

Plus, he says, it's also important to look ahead and see how the refinance will affect your future. He warns that although you're saving money, you're also putting years back on your mortgage.

"Say, for example, someone has originally taken out a 30-year mortgage, and when they're down to say eight or nine years into the mortgage, they're going to take a lower interest rate and save money," says Gross. "But they're also going to add again the eight to nine years back, and they're starting over again with the 30. So you really need to consider these things before going through with a refinance."

Smart Tip #2: Make Extra Principal Payments or Change to Bi-weekly Payments
Making extra principal payments might be a good way to pay off your mortgage early, since you'll be paying less in interest overall. The principal payment goes directly toward the money actually owed on your mortgage - whereas a regular monthly mortgage payment goes toward both the principal and interest that is owed.

When you pay down your principal, you'll not only pay off your loan sooner, but you'll also save on interest - since the amount you pay in interest will be calculated based on a lower amount. And just one extra payment a year could help in the long run.

In fact, "If you have a regular job and you're not self-employed, and know exactly what your income is going to be each month, and you have a few extra dollars, I would say it pays to throw in an extra principal payment maybe once a year," says Gross.

But if coming up with the extra money to make that payment seems close to impossible, you may want to consider a bi-weekly payment plan - which has less of a shock on your wallet than just outright making an extra payment.

Here's why: With the bi-weekly plan, you make a mortgage payment every two weeks. So if your monthly mortgage payment is $1,200, for example, you would pay $600 every other week. And since there are 52 weeks in a year, you'll be making 26 payments - or 13 monthly payments - without really realizing it.

With either option, however, be sure to make a note that the extra payment should be going toward your principal. Otherwise, your lender may just put it toward both your principal and interest, which won't help as much in the long run.

So just how much can one extra payment per year pay off? Let's say you owe $200,000 on your 30-year fixed-rate loan which has an interest rate at 4 percent. If you made one extra payment per year, you could own your home four years sooner, and save over $22,000 over the life of the mortgage.

Smart Tip #3: Don't Pay Off Your Mortgage if You Can Get a Higher ROI elsewhere
Drag out your mortgage payments? At first, that might seem downright silly. But, in some circumstances it would be in the homeowner's best interest to not pay off their mortgage quickly.

One circumstance is if other investments will yield a better return, says Gross.

Gross offers an example: Let's say you currently have a mortgage where you're paying 4 percent interest, and it will cost you $50,000 to pay off your mortgage. If you have an investment opportunity that will yield a 6 or 12 percent return, it could be a smart option to invest that $50,000 instead of using it to pay off your mortgage, he says. That's because if you're borrowing at 4 percent and you have the opportunity to see even a 6 percent return on an investment, that's a potential 2 percent gain that could go straight into your pocket (after you pay taxes on it, of course).

Secondly, Gross says not paying off your mortgage quickly could also help lower your tax bracket.

"Right now, there's an interest deduction on your tax returns," says Gross. "So if you use the $50,000 to pay off your mortgage early, you lose the mortgage interest deduction on your taxes."

Smart Tip #4: Make Sure You Have Liquid Assets for Emergencies
Since life can be unpredictable, it's always wise to have available liquid assets - something that can be quickly converted into cash, such as stocks, bonds, treasury bills, and money-market fund shares - as financial backup in the event of an emergency or any other situation that would require ready cash.
And if you're using up your liquid assets to pay down your mortgage faster, you may want to rethink your strategy.

"You always want to have liquid assets," asserts Gross. "Typically I would suggest having at least three months of mortgage payments that are liquid. That's certainly important, because you never know when you might need some emergency cash."

So that means you might want to put the brakes on paying off your mortgage quickly if you're using your liquid assets to do so. If you find yourself in a situation where you have to borrow money in the future, it's highly unlikely that the cost of borrowing the money will be as low as your mortgage interest rate is.

via yahoo homes

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What Do Buyers Really Want in a Home?

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What sets one home apart from another as buyers are touring homes? What features do buyers truly need, and which amenities would they merely view as a bonus? The National Association of Realtors has tried to answer those questions (and more) with the recently released 2013 Profile of Buyers' Home Feature Preferences. The survey was completed by buyers who purchased a home between 2010 and 2012.

According to the study:
"The typical buyer bought a home with three bedrooms and two full bathrooms. About half of homes purchased were on a single level, while two-fifths were on two levels. Garages were more popular among buyers of new homes, homes in the Midwest, and homes in the suburbs. Fireplaces were most common in higher priced homes, homes in resort or recreation areas, and in detached single-family homes. Forty-one percent of homes had basements, which could be finished, partially finished or unfinished. Finished basements were more popular among single males, younger home buyers, and buyers in the Northeast and Midwest."

For sellers who are looking at remodeling, and want to make sure their renovation dollars are well spent, this could be a road map of what to update or add to their homes. Some other highlights:

• 78% of buyers chose a home with a garage
• 58% purchased a home with a fireplace
• New kitchen appliances were more important to buyers than granite countertops
• 69% of buyers who didn't buy a home with new appliances would have been willing to pay more for a home that had them
• Among buyers 55 and older, 42% rated a single level home style very important, compared to only 11% of buyers under 35
• Buyers were willing to pay a higher dollar value for an in-law suite and a basement than other extra room types.
• The feature that had the highest dollar value buyers were willing to pay extra for? Waterfront location.
• 53% of buyers started a home improvement project within 3 months of buying, typically in the kitchen.
• The majority of buyers wanted more or larger closets and more storage.

by Heather Elias

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5 Ways To Screw Up A Mortgage Refinance

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A mortgage refinance boom is in full swing, as homeowners take advantage of record low rates by refinancing their home loans.

But a home loan refi is more complicated than it was a few years ago. Home values are lower and paperwork requirements are higher. It's easy to make mistakes while refinancing a mortgage.

To help you avoid some of the most common errors, here is a list of five things you shouldn't do when you refi.

Be unrealistic about your home's value
Deluding yourself about the value of your home is an excellent way to ruin a refi. Too many homeowners ignore falling home values in their neighborhood, convincing themselves their houses are worth at least what they paid for them.

In mortgage refinances today, the most common reason for denial is a home appraisal that comes in too low. The lender won't lend for more than the appraised value. And a lot of homeowners go into denial about the decreased values of their homes.

"Don't overestimate what the value of your home is. Don't kid yourself and think your house is worth $500,000 when it's really only worth $400,000," says Dale Robyn Siegel, author of the book "The New Rules for Mortgages" and owner of Circle Mortgage Group in Harrison, N.Y.

Dither about your rate lock
Homeowners who delay locking a good mortgage rate risk making a refi uneconomical.

While floating, you take the risk that mortgage rates will go up. Rates could rise enough so that it's no longer worth the time and expense of refinancing, says Bob Walters, chief economist for Quicken Loans.

Also, rate locks have expiration dates. So, it's a good idea to build a cushion of a few days in case there's a delay in the loan closing, says Dan Green, mortgage planner for Waterstone Mortgage in Cincinnati.

If you have a 30-day rate lock, it's better to set the closing date on the 28th day than the 30th day -- just in case there's a snag that delays the closing by a day or two.

Start renovating your house before the appraiser visits
Taking a sledgehammer to the interior of your home before the appraiser arrives is a good way to get turned down for a refi.

The appraiser delivers an estimate of the home's value on the day of the inspection. The house will be worth less on that day if the upstairs is a shambles or the bathroom fixtures have been ripped out. That's the case even if the renovations, when completed, will enhance the home's value.

"Don't start a renovation before the appraiser gets there," Walters says. "You'll see this sometimes when people are taking cash out and want to do a bunch of stuff. Do not do that, because if you've ripped out half the second floor and it's not in final condition, we can't close your loan."

If you plan to renovate, start after closing the refi.

Disappear and ignore the lender's calls
Want to throw your home loan into limbo?

"Go on vacation and don't tell the lender," Walters says.

Lack of communication will throw a pending mortgage into turmoil. "Remain accessible," Walters says. "Don't disappear. Sometimes people do."

A lengthy disappearance might have been a nonissue a few years ago, but it's not a good idea now. Lenders' paperwork requirements are more stringent than they were three years ago.

Expect the lender to ask for documents sometime between application and closing. It might be a request for your latest pay stub or an explanation of a big deposit into your checking account.

Stay in contact with the lender, and respond sooner rather than later to requests for more documentation.

Start over with another 30-year term
If you want to do long-term damage to your personal finances, start all over again by refinancing for a full, 30-year term. That way, you spend thousands of dollars on interest that you otherwise could have saved.

"The first question I say is, 'How long have you had that mortgage?'" Siegel says. "If they've had it for at least four to six years, I say, 'Look, I know you want to refinance, but at least let's do a 25-year, so you're not back at square one.'"

Then, she explains the monthly payment on a 20-year term, because after hearing the details "(they) might want that.'"

Reducing the term by just five years can yield big savings. On a $200,000 mortgage at 5 percent, you save $35,758 in interest by paying off the loan in 25 years instead of 30.

Pay off that home loan in 20 years instead of 30, and you save $69,733 in interest.

via bankrate

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Top 5 Ways To Give Your Bathroom A Makeover

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You spend a lot of your time in your bathroom. Invest in making it somewhere you actually want to be with these top five tips.

Your bathroom is one of the most important rooms in your home, but it's often the most neglected, too.

In fact, "Nine times out of 10, the bathroom isn't up to par with what we wish it would be," says Julie Berchtold of the California-based design firm, Berchtold Harris.

Whether it's a leaky faucet, outdated countertop, or a much-needed facelift, remodeling a bathroom can be one of the most gratifying projects for improving your entire home. That's right - a bathroom remodel goes far beyond just improving your bathroom.

"Maximizing the space you have and creating an environment where you actually want to spend your time can completely change your outlook on the rest of your home," adds Berchtold's design partner, Samantha Harris.

But when you decide to get down to the nitty-gritty, where do you start?

Read on for five projects that will have you ready to ring up the contractor and get started on your own bathroom remodel today.

Get a Shiny New Floor
You should approach your bathroom remodel from the bottom up, if you want a stunning end product. And "from the bottom up," we're talking about the floor.

The floor is the most important and permanent part of any bathroom upgrade, says Matt Wien of Marshall Carpet One in Mayfield Heights, Ohio.

"Because everything will go on top of it, your floor sets the stage for the entire bathroom and is the one element that's the most difficult to change," he says.

So what are some good flooring options? A natural stone or a porcelain tile with a radiant heat system is a great choice if you're looking for durability.

"Because you can't hurt natural stone or porcelain tile, it will last for as long as you want it there," says Wien. "And the radiant heat is nice because it will keep your feet warm and help the floor to dry faster, reducing the likelihood of slipping."

However, natural stone and porcelain are also some of the pricier options, with Wien noting that a heated porcelain or natural stone floor will run you anywhere from $15 to $20 per square foot. An unheated floor? Between $8 and $12 per square foot.

If you're looking for a more budget-friendly option, consider going with vinyl.

"Luxury vinyl allows people to put new flooring over their existing floors with minimal prep, saving you a lot of money," says Wien. The downfall is that vinyl floors will need to be replaced in eight to 10 years, unlike the permanency of natural stone or porcelain.

"Vinyl's a great option if you're remodeling to sell. And at $4 to $7 per square foot, you can't beat the price," he adds.

Replace Your Countertops
What's another small change that can make a big difference in your bathroom? Countertops. Because bathrooms are generally smaller than what people want, choosing a light color or a great stone piece is an easy way to make your bathroom feel larger.

"We're big fans of a statuary marble in light white with a thin grey veining," says Berchtold. "It adds a level of luxury while still keeping everything light and fresh."

If you're watching your wallet, Wien says you should pay a visit to a granite or stone scrapyard and pick through the smaller cuts. "For smaller bathrooms, you can often pick up a scrap piece of a gorgeous stone for a whole lot less."

If marble or granite still isn't in your budget, Wien recommends laminates or Formica. "They're great alternatives to stone because they give you a similar look at a lower price point." They may also be easier to maintain because unlike a porous natural stone, a laminate doesn't need to be sealed against stains and water.

Reface or Replace Your Cabinets
Cabinets can be one of the most expensive remodel elements of a bathroom, but don't lose all hope: Berchtold says re-purposing what you already have can do wonders.

"Taking your existing cabinets and giving them a layer of a bright white lacquer is a great way to make a statement and barely makes a dent in the budget," she says.

Another option that won't break the bank? Cabinet refacing, which is the process of replacing or upgrading cabinet doors and drawer fronts while retaining the main cabinet structure. Essentially, you'll be giving your bathroom cabinets a facelift. And it costs anywhere from $150 to $300 per cabinet door, according to "Improve Your Cabinet's Style," by Consumer Reports.

If your old cabinets need more than just a facelift, consider splurging on a serious upgrade, says Jillian Gage of JL Powers Design, who offers this design advice: "Custom-made reclaimed wood cabinets aren't cheap, but they're a great eco-friendly way to add a unique and rustic vibe to the room."

For more modern styles or a beach vibe, Gage suggests that you "Ask for cerused oak panels, which are washed with a preparation of white paint, for a clean and chic look. More contemporary homeowners can opt for metal cabinet drawers with frosted glass panels or mirror-on-mirror treatments."

Add a Window or Skylight
Because bathrooms are often in the middle of the house, you might not immediately think that adding a window is a viable option, but Gage begs to differ.

"Skylights are the perfect solution for flooding the bathroom with natural light," she says.
However, she does note that there is one big hurdle for adding a skylight to a bathroom: finding a licensed contractor who is up to par.

"Any time you're making structural changes, be sure to ask for recommendations from previous clients to ensure that you're getting someone reliable. A good design firm should also have at least a handful of contractors they can suggest," Gage adds.

If you're not looking to use a contractor and already have windows in your bathroom, window treatments can be an inexpensive way to kick things up a notch. Gage advises going outside the realm of traditional shades and looking into a bamboo or natural fiber shade.

"It's a nice way of keeping the room private but still letting light come in," she says.

Upgrade Your Hardware
When it comes to renovating your bathroom, it's all in the details. And that's why upgrading the hardware in your bathroom is key.
W
hat's more, the type of hardware you choose makes an important statement on the style of your bathroom.

For example, "We like to focus on the knobs," says Berchtold. "They're the biggest trick we have to upgrading a bathroom on a budget."

She recommends finding the best hardware, whether it's old and vintage or big and oversized. "Rustic, repurposed hardware is a great juxtaposition in a bright modern bathroom. Or you can opt to go all modern and utilize big, oversized knobs," adds Berchtold.

via yahoo homes

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How To Make Moving Efficient And Easier On Everyone

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Poll the average person and ask them what they think of having to move to a new residence and the answer won’t be all peaches and sunshine. It’s certain that almost can agree that having to move can be a time-consuming necessity, but nonetheless it’s a necessity. Settling on a new place can be a chore in and of itself, and having to plan, pack and unpack is on deck.

And procrastinating won’t get you any further, either. In fact, having a plan in place and the motivation to see through it is what separates an easy move from a loathsome one. With that said, below are a few basic tips to making the most from your move.

The Plan Before The Plan
Right off the bat, you must decide if you have the time and energy to do the move yourself or if you should hire a professional to do the task instead. There’s probably an abundance of moving companies around your area, but if you have some spacious trucks and a few helping hands to do if for you, that’s another option. Just make sure you’ve got this one decided before doing anything else.

Lists, Lists And More Lists!
Grab the nearest legal pad and start surveying your possessions. Make a note of every one, from the most fragile to the sturdiest. What this does is allow you to see just how much clutter you have in your home and you’ll know whether or not a garage sale is in order, or better yet, you can donate them to local charities.

Sort Packaged Items By Room
This one will save you time during the unpacking phase. As you start to pack up items, label the boxes for kitchen, living room, bedrooms and so forth. The last thing you want is a bunch of boxes stacked on top of each other in one empty room of your new home and not know which go where.

Pack Weeks In Advance
As procrastinators love to wait till a few days before the move, you should do the opposite. You should begin packing up all small to medium-sized belongings weeks in advance. In fact, save a block of time on certain days and dedicate that solely to packing. Also, if you’re in the hunt for big, sturdy boxes and don’t want to have to pay for them, ask around for some and see if friends and family have some in storage. Or go to the grocery store or liquor store and see if they have any extra boxes lying around.

Take Your Time When Lifting and Hauling
I included this one specifically because I’ve injured myself needlessly by either trying to act like a hero and carry more items than I should at once, or I just was not aware of my surroundings (see: steps and stairs). Be cautious with how you lift and haul away bulky items like couches and mattresses or other heavy objects to and from the truck and on into the home. Instead, call upon the help of two or three of your friends with each heavy item, being careful to bend at the knees and not put the weight solely on your back. There’s no sense in pulling a muscle or having something worse happen.

If Possible, Make Less Trips Back And Forth
Some moves require a lot of backtracking from the old home to the new one because there are simply too many items to be hauled away. But, if you take a few extra minutes with how you store every box in a truck or moving van and open up more space, you’ll be saving yourself an extra trip, which in turn saves the gas tank in the end. And really, this is all about making the move as effortless and swift as possible.

Lastly, Don’t Put Off Unpacking
I fell into this category on a couple of my moves where I just wanted to rest on the couch in my pretty bare-bones living room with just the T.V. and cable box to bide my time. All those unpacked boxes scattered around the house just stood there for a couple days to the point I would get to them one by one through the week.

Don’t do that.

You’ll have wasted all those good hours you saved from doing the previous steps and probably tack on a few more in the process. While you may be exhausted from the moving day, unpacking and sorting your possessions throughout your new residence can give you a good idea of what you want the layout to be and feel.

Concluding Thoughts
Moving into a new home should be about good vibes and getting the new chapter in your life underway. Don’t let the happy emotions fall by the wayside by dreading the moving process. Rather, embrace it and get a jumpstart on it. The rest should fall in place.

via homegain.com

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5 Cheap Ways to Increase Home Value

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Selling your home this summer? Cheap tweaks can pay off big time. “And even when these don’t equate to big dollars, they may help sell your property faster,” says Adam Hade, an associate broker with Houlihan Lawrence in southeastern New York state.

But choosing which improvements to make is where many homeowners go wrong, according to Hade. “They over-improve or improve in ways that don’t really matter to the buyers in their particular area,” he says.

Exactly the reason you should consult with a qualified realtor in your neighborhood before investing in any improvement projects. They can tell you if buyers are looking for nurseries or extra bedrooms and can actually save you money by preventing well-intended but unnecessary upgrades.

One such superfluous improvement is splurging on high-end kitchen appliances. “While a buyer may appreciate chef-quality ranges or top-of-the-line fixtures, a well-kept lower-price brand will rarely break a deal,” says Hade. “On the other hand, worn carpet, dirty grout and clutter will give the impression that the house is not well-maintained and lacks sufficient storage,” he adds. Details like these make it difficult–and even impossible–for many prospective buyers to envision themselves living there.

A home’s layout is another adjustable feature sellers should take advantage of. Dina Landi of Rebecca Riskin & Associates in Montecito, Calif., suggests reconfiguring your home’s layout to meet market demands. Substituting one room’s use for another is a cheap way to transform a three-bedroom home with a den to a four-bedroom home. Or a home that has a dining room with doors can be reconfigured for use as a main floor master bedroom.

The best way to improve home values on the cheap is to do what needs doing–and nothing more. Here are five smart and simple ways:

Don't Add a Room, Invent One
Main floor master bedrooms, nurseries, and crafting rooms are desirable, but many homes don’t have them. If you have a den, attic, or bonus room, decorate it to look like one of these. Your realtor can tell you what clients in the area are looking for.

Create Multiple Seating Areas
An empty stone terrace becomes an instant second dining room with the addition of patio furniture. Add to that, the furniture emphasizes the size of the space and creates a destination. Hade, the realtor with Houlihan Lawrence, recommends creating spaces like this inside and out.

Fix Right for Your Home Type
Every home has a personality and a function. Buyers seeking a little lakeside cabin aren’t looking for granite countertops. So, don’t add them. Young families aren’t looking for an elaborate master bath. So focus on the yard. The cozy look of a wood interior is what buyers want from a log cabin. So, don’t paint or drywall. Stain the deck, instead.

Get Creative with Cabinetry
This house in Katonah, N.Y., features a gorgeous kitchen renovation. “By painting the cabinets instead of purchasing new ones, the owner was able to create a wonderful space without investing in new cabinetry,” said Hade, who is listing the house. Changing the hardware is another way to update cabinetry without buying new.

Group Potted Plants
Set at a front entry, three large terra-cotta pots filled with colorful blooms create instant curb appeal. So, why landscape? Lining the perimeter of a deck or terrace with potted annuals enhances those spaces as well. Selling in winter? Fill the pots with seasonal foliage, such as holly branches or pine boughs.

via yahoo homes

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10 Worst Things to Forget Before a Major Move

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NEW YORK (MainStreet) -- Moving day is a giant logistical hassle before you get to the minutiae. A missed detail just makes it that much worse.

Renting a truck, hiring movers and getting stuff packed up and out of the house are the relatively easy portions of the move. Only when you get second notices forwarded to your new address or the lights cut off as you're packing up the old one do you realize how much the little things add up.

In the interests of saving readers some hassle while they plan to ship out, we contacted the American Moving and Storage Association industry group and asked if there were any common oversights its customers made while planning long or involved moves. The following 10 items are usually the easiest to overlook and the toughest to just shove into a garbage bag with the contents of the junk drawer at the last minutes:

Your local government 
If you don't have a driveway for a moving truck to pull into or a storage container to be dropped in, chances are you need to put it on the street. If that's the case, in some places you're going to need a permit. To get that permit, you're going to need some sort of proof the company you're working with is insured or bonded with the local government. That's the case in Massachusetts, Florida and elsewhere and it can really put a crimp in your moving plans if you don't check first and your belongings end up in the impound lot.

Your hidden belongings 
It seems pretty obvious, but taking another few sweeps around the house can help you avoid leaving grandma's china to the new tenants or going without holiday decorations for a season or so. AMSA spokesman John Bisey says the easiest items to forget are usually those tucked away in crawlspaces, attics and built-in cabinets. If there's a spot in your house or apartment that's out of sight, chances are that's where your last box full of stuff is coming from.

Your items on loan 
Wondering where your reciprocating saw or popcorn maker got off to? Check in with the neighbors. The AMSA says items lent to neighbors, family or friends tend to cause customers the greatest headaches once they realize they're gone. Take some quick inventory and make some rounds at the going-away party.

Your sleeping arrangements 
So you've packed up the truck or container and are ready to take off in the morning. That's great, but where are you going to sleep tonight? The first night at the new destination isn't that big of a problem, as you'll get to your bed eventually, but the last night after the big load-up can be a bit tough if you don't pack the bed last or stay with someone else for the evening.

Your records 
It's a lot easier to do things electronically these days, but that's not always the case with medical, dental or school records. Sometimes it's just easier to keep these things on hand, so try to get copies from everyone as soon as you're ready to pack them up. Once you have them, keep them all in the same place so they're easy to refer to once you're setting up your new home.

Your heat and lights 
If you don't turn the electricity, gas or oil heat on, nobody's going to do it for you. The AMSA advises turning off all of the utilities two to three days after you load out and turning them on at the new place two to three days before you move in. It's not great to get a bill for lights someone else is using forwarded to the address you're already being charged for. Speaking of forwarding ...

Your mail 
Oh yeah, you're going to want to check in with the U.S. Postal Service and make sure it knows you're leaving. It'll only forward mail to your new address if you check with it in advance, and even then it's not permanent. Forwarding basically gives you a couple of months to change your mailing address with various institutions yourself. At some point, that yellow forwarding label's going to stop appearing. Just get the service's handy little change of address kit and you should be fine.

Your insurance 
"Be careful when referring to 'insurance,'" Bisey warns. "Very few movers offer true insurance, which is regulated by the states and is offered by an insurance agent."

The best you can get from the movers themselves is valuation protection, which covers only a percentage of what your goods are worth. In May, a federal regulation took effect requiring interstate movers to include the cost of full-value protection in their initial written estimate. This should give consumers some second thoughts about choosing the minimal valuation option, which is only 60 cents per pound.

Your paid labor 
If you tip someone for carrying a tray of food to you, you may want to consider tipping the people who just lugged a dresser up to your fourth-floor walk-up. There's no hard-and-fast rule about this, but if you're not at least offering some water afterward, you have no sense of empathy whatsoever.

"Not sure if people forget to tip or if they just don't think they should," Bisey says. "It's certainly not a requirement or even expected by most movers, but it is appreciated."

Your mess 
Whether there are a few nail holes left in the walls where your family photos once hung or a huge paint spot in the closet from when you knocked over a gallon of Periwinkle Blue, it's usually in your best interest to take care of it immediately. Your security deposit or even a sale could hang in the balance.

"I think the last-minute repairs and/or fix-ups are legit," Bisey says. "Especially when, for example, a large piece of furniture is moved away, revealing a problem with the floor or wall it was hiding."

via The Street

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6 Hidden Costs of Home Ownership

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They say humans are born with only two fears: the fear of falling and the fear of loud noises. But as we get older, we learn to be afraid of lots of other things, from snakes to radio show hosts on the other end of the political spectrum from ourselves.

But seriously, one of the biggest, learned fears of home buyers and home owners, old and new, is the fear of unpredictability in our home-related expenses, whether it be an unexpected one-time repair or just a trickle of little, monthly costs we didn’t account for.

The fortunate thing about this particular set of fears is that you can unlearn them by getting educated about the common surprise costs that arise and managing them systematically. Here’s a how to do just that:

1. Property tax increases.  So, you got a 30-year-fixed home loan, and you set up an impound account with your bank so as not to have to worry about paying big lump sums for your property taxes twice a year. Fact is, the day could still come where you get a note from the bank advising you that your payment is going to go up - because your property taxes have increased! Property taxes are based on your home’s value, so as the value of your home rises, your property taxes will likely also go up over time.

Talk with your mortgage professional about how homes are reassessed for tax purposes in your area: how often they are reassessed, when, and whether there are any limits on how much your taxes can go up in a given year. Understanding how tax increases work and what their limits are allows you to predict and project your worst case scenarios in terms of extra costs, years in advance.  It also helps to know that in a down market, your homes value - and property taxes - can also decrease, and to know that your property taxes are deductible on your income tax return. So, if you do have increases, you’ll have a corresponding tax break.

2. Utilities. Garbage, gas, water - these all cost money, something that’s easy to forget when your landlord is covering them. But when you own a home, you also own these bills. During the buying process, it can be very difficult to predict exactly how much these bills will run. Your best bet is to ask the seller if they will kindly provide you with copies or at least the amounts of their recent utility bills, so that you can have some sort of basis in reality for your own budget and spending plan.  Also, it’s not a terrible idea, once you own the place, to go through and do an energy audit to find places where you can stop leaks of heat, cool air and water, and otherwise put a cap on those utility bills.

3. Unexpected repairs.  Obviously, the reason we get disclosures and inspections and such is to minimize the likelihood of buying a lemon of a home - and minimize the spectre of unexpected repair costs. Your first line of defense at managing these costs is the one-two punch you have to execute during escrow: (1) reading your disclosures and inspection reports and getting repair bids for any issues that arise therein, and (2) obtaining a home warranty to cover things that arise later on.

Most people get #2 right, but don’t pay as much attention to disclosure and inspection report follow-up as they should. The other common fail is that people allow their home warranty to expire after a year, rather than paying the annual renewal fee (new home owners: expect to see this in the mail 10 or 11 months after closing). Don’t fall into either of these pitfalls: if you own a home long enough, chances are good that you’ll eventually have some unexpected need for a repair come up, whether it’s a plumbing snafu or a roof leak. Keep a handle on your home repair bills by keeping a home warranty in place, and keeping your home’s systems well maintained (see #6 on this list).

Beyond that, stay smart about your financial planning by diligently saving so you have funds to tap into in an emergency, and by making informed decisions about your insurance policies (e.g., exploring flood or earthquake insurance if you live in an area where these are common hazards). Ask your home owners insurance provider to brief you on what is and isn’t covered, to be sure you’re not unduly exposed to repair costs if bad things happen.

4. HOA dues increases.  If you choose to buy a home in a Home Owner’s Association (HOA), you’ll be given a number of disclosures about what the HOA dues are during escrow, so the dues themselves should be no surprise. What can come as a surprise, though, is the fact that dues can go up over time - sometimes in relatively shorter order. I’d encourage you not to skim lightly over what may seem like the least important of the HOA documents you’ll receive: the newsletters and board meeting minutes.  You might expect them to be full of minutae like stories about Mrs. Cranston’s rogue tabby cat - and indeed you might find that in there - but you’re also likely to find discussions of proposed HOA dues increases far in advance of them being enacted, as well as discussions about major building or complex repairs and upgrades that need to happen and how they will be paid for.

The other thing you can and should do to avoid getting blindsided by an increase in your HOA dues is to simply be a present and active participant in your HOA, including attending board meetings, sitting on the board or simply building relationships with your neighbors. The board makes many decisions which impact the HOA dues and assessments that will be levied on all members.  So getting yourself on or in the room with the Board puts you that much closer to the power position for managing your dues.

I only have anecdotal evidence on this point, but I believe strongly that HOAs where the members have close interpersonal relationships are HOAs where the members are much less likely to default on their dues - even if they default on their mortgages! Associations nationwide have been plagued by high rates of dues default since the start of the recession, and when one or five or eight members default repeatedly, everyone else’s dues are likely to be raised to cover the shortage. Having your neighbor over for coffee on occasion or watering their plants while they travel boosts your chances of keeping a handle on your HOA dues and are just nice neighborly things to do - if they help keep a lid on your costs of homeownership, too?  All the better.

5. Special assessments.  There are two types of special assessments for homeowners. The first are assessments imposed by the City, County or State on top of your property taxes, to pay for things like street lighting, parks, first responder agencies and to help the schools out - these are often imposed after a city or district-wide vote, which helps you predict for them. If you’re planning to buy a home, often the seller’s tax bill - which you can get from them or even, in most areas, on the county tax assessor’s website - will list the existing special assessments separately from the property taxes, so you can know how to budget for them.

The second type are assessments imposed on HOA members when the building or complex needs a major repair that the HOA has insufficient funds saved up for, or a large, unexpected repair needs to be made. For example, I know of a number of California HOAs that imposed special assessments to replace the buildings’ roofs when many insurance companies stopped covering buildings with wood shake roofs.

Again, staying involved with your HOA and board helps keep you apprised and avoid being completely shocked by special assessments, but it also behooves buyers of homes in HOAs to look carefully over the HOA financials, including their reserve account statements and their plans for maintaining the buildings over the years.  Many HOAs do a great job of planning to replace roofs, windows, private roads and walkways years in advance - and saving up for these projects - to minimize the chances of having to make surprise special assessments. And others, well, don’t.

6. Basic maintenance. When I bought my current home I gutted it to the studs and remodeled it completely, including all new appliances and systems,so I haven’t had to do many fixes on broken things - knock wood. Yet and still, every year, Spring rolls around and I end up spending a nice chunk of change just keeping the place in tip top shape, from having the gutters and carpets cleaned, to having the windows and exterior power washed, to having my backyard (known affectionately by my friends as Jurassic Park) weeded and the paint touched up inside and out.  Being aggressive about maintaining your home on an ongoing basis allows you to avoid bigger, scary repair bills later on - but it does cost.

The only way I know to manage these costs are to plan for them - I keep a running spreadsheet of little fixes, touch-ups and mini-upgrades (e.g., putting in a dimmer, etc.) I want to do to my home. That allows me to plan and budget for them all year round, so that it’s fun and exciting when the time rolls around to do them. Some maintenance costs, like pest control, may be available on a monthly contract with your vendor, making them much more predictable. Finally, these are costs that are well-suited to being minimized by a little DIY weekend work - if you’re so inclined and you have the time, you might be able to do these sorts of basic maintenance items yourself to keep the costs down considerably.

via trulia

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How To Lower Your Home Insurance Rate

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Home insurance checkup could lower costs, improve coverage
The national average premium for homeowners insurance will increase by 5% in 2012, according to forecasts by the Insurance Information Institute. That follows an increase of nearly 4% in 2011, and it will bring the average annual premium to an all-time high of $1,000.

At the same time, home insurers are adding exclusions and requiring higher premiums to cover certain risks, such as mold and water damage.

Meanwhile, the housing bust and recession have pushed the median home price down 35% since the market’s peak. But the cost to rebuild a home after a total loss has increased by 40% since 2004 — 7% in 2011 alone — thanks to rising building-material and fuel prices.

So you could find yourself paying more for less coverage. Worse, you may not have enough insurance to cover the full cost of rebuilding your home and replacing its contents in the event of a fire, a tornado or some other major disaster.

Use your annual renewal notice or any improvements to your home as cues to touch base with your agent or insurer. Recheck how much insurance you really need and comparison-shop, taking advantage of opportunities to save. You can use the same tactics if you’re buying a new policy.

Check your limits
“In the aftermath of a total loss, every homeowner says, ‘My insurer told me I was fully insured,’ ” says Amy Bach, executive director of United Policyholders, a consumer advocacy group. “I’ve heard it a thousand times from people who have found themselves short—sometimes by hundreds of thousands of dollars.” She urges homeowners not to blindly trust that their home insurer has all the bases covered.

The first step in getting adequate coverage is to establish your policy’s dwelling limit. Your target number is the full-replacement cost of your home and its possessions. The dwelling limit bears no relation to your property’s market value (if you were to sell it), its appraised value (for mortgage financing) or its assessed tax value. And don’t mistake the cost of new construction for the cost to rebuild, which is more expensive because of factors such as debris removal and higher demand for materials and labor after a catastrophe. Bach says it generally costs $200 to $250 per square foot to rebuild the average home today. But if you live in a unique or historic home, in a high-end community, or in a hard-to-reach location, the cost could run $400 per square foot.

You can get a pretty good idea of what it would cost to rebuild your home by using an online calculator, available at sites such as HMFacts.com ($7) and AccuCoverage.com ($8). Both will ask you about the structural components, features and amenities of your home and, using databases of local labor and material costs, estimate your total cost to rebuild.

Your insurer or agent will probably help you determine the dwelling limit, using much the same script as the online tools do. Although you can answer many questions about your home over the phone, nothing substitutes for an on-site visit. Site visits are a routine practice for many independent agents, who represent more than one insurer, and for representatives of high-end insurers, such as Chubb and Fireman’s Fund.

The dwelling limit also determines your policy’s other coverages—typically 10% of the dwelling limit for other structures on your property, 50% for contents and 20% for loss of use of your home (additional living expenses when you can’t live in your home).

Take stock of your stuff
The amount of coverage built into your policy for the possessions in your home (as a percentage of the dwelling limit) may be inadequate to replace them. And although your policy may cover expensive items, such as jewelry and furs, it may limit the payout to $1,000 to $2,000. (Other items that may be capped include silverware, computer equipment, art, antiques, stamps, coins and guns.)

Create a home inventory to ensure that you have the right amount and type of coverage. In addition, an inventory will make filing a claim smoother, establish verifiable value for your things after a disaster, and make it easier to prove your losses for tax purposes. The Insurance Information Institute’s home-inventory iPhone app and the app from the National Association of Insurance Commissioners make saving that information a snap. Be sure to include serial numbers, photos or a video, and receipts or appraisals.

Once you know what you have and how much it will cost to replace, you can add coverage with a scheduled personal property endorsement (or personal article floater), which typically costs about $20 per $1,000 of property value annually (although it varies by item and location).

Update your inventory periodi­cally to cover new purchases and gifts, and get updated appraisals of your valuables so that you can adjust your coverage. For example, gold jewelry inherited from Mom could be worth almost three times what it was worth five years ago.

Cover the gaps
It’s a good idea to purchase guaranteed replacement coverage, meaning the insurer will pay whatever it costs to rebuild your home with materials of like kind and quality, without deducting for wear and tear. Avoid actual cash value coverage, which pays the depreciated value of your home’s components and could leave you short of the funds necessary to fully repair or rebuild your home.

Most insurers build a fudge factor of 25% to 50% into the dwelling limit. Lacking that, you need to buy extended replacement coverage, a bargain at about $25 to $30 annually for an extra $200,000 of coverage, says Bach.

You might be tempted to save money by reducing your dwelling limit and picking up the balance with extended coverage. Two caveats here: First, you’ll reduce coverage of your contents as a percentage of the dwelling limit. Second, in the event of a total loss, your policy’s current dwelling limit must equal at least 80% of the cost to rebuild or you won’t get the benefit of any extended coverage to make up the difference.

Also, look for protection against a higher cost to rebuild due to inflation (inflation-guard endorsement) or upgraded building codes (ordinance or law endorsement).

A number of insurers have switched from the broader and more desirable all-risks coverage (covering everything except those things expressly excluded) to the more narrowly defined named-perils policy, which should cost less but may not. Request an all-risks policy, and if an insurer doesn’t offer it, look elsewhere. Review your policy’s exclusions for risks such as wind, water, earthquakes, sinkholes and flooding, and buy supplemental coverage. Flood insurance is never included in standard homeowners policies. You’ll need to get coverage from the National Flood Insurance Program (get quotes and information about flood risks for your property at www.floodsmart.gov).

Sewage backup is often excluded from homeowners insurance policies unless you get a special rider, which can often add $10,000 to $20,000 in coverage for about $50 per year. In fact, that’s one of the most common insurance gaps people discover during storm season and one of the easiest to fill. Last August, as Hurricane Irene moved up the East Coast, Steve Weisbart, chief economist for the Insurance Information Institute, was glad that he, unlike many of his neighbors, had coverage in case his sewers and drains backed up. As local sump pumps emptied water from basements into the overwhelmed sewer system, the sewage backed up into homes through toilets and drains. Weisbart collected on a $10,000 claim.

Your homeowners insurance also covers personal liability and medical payments to others. The typical policy provides $300,000 of liability coverage, which will protect you if someone is injured on your property. You can increase your coverage to $500,000 for about $25 more a year. Consider increasing your liability coverage to $1 million with an umbrella policy.

Get the best deal
When they decide whether to cover you, insurers consider factors such as the age, materials, condition and replacement cost of your home, the risk associated with your location, your claims history (the type and number of claims that you’ve filed or that your home has experienced), and your credit score.

Comparison shopping is easier if you work with an independent agent who represents many insurers (to find one, visit Independent Insurance Agents and Brokers of America). You’ll pay a commission (typically 10% to 15% of the annual premium), but it may be worth it for the guidance, and the agent should explain why one insurer or policy will better meet your needs than another. You can also get quotes from a direct-market company, such as Geico or USAA. And it’s worth checking out State Farm and Allstate, which sell through their own agents.

For specific advice about homeowners insurance in your state, visit the Web site of your state’s department of insurance, which may provide worksheets for comparison shopping. Before you buy a policy, check prospective insurers’ ratings for financial strength (at www.ambest.com) and complaint records. Also, keep a record of your communications, as well as the insurer’s assurances of coverage should there be any question of your coverage after a disaster.

via yahoo realestate

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4 Emotional Mistakes Made by Home Sellers

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Keep emotion out of selling a home
The greatest hindrance to the sale of a home can be a seller who is seized by emotion.

"It is very important for sellers to (keep) in mind that a real estate transaction is most likely the single largest financial transaction they will ever undertake," says Fiona Dogan, a realtor in the Rye, N.Y., office of Julia B. Fee Sotheby's International Realty. "It should be viewed and handled primarily as a business transaction, with cold, hard decisions being made on a financial and investment basis."

Home sellers who allow emotions and sentimental attachments to overtake them during the sales process run the risk of making hasty, sometimes poor decisions, Dogan says.

Here are some tips to help any home seller avoid making emotional mistakes that could cost money.

Home-selling emotional error: Overpricing
Getting top dollar is the dream of every home seller. But getting a buyer to pay a premium for features that are valuable only to you? That's closer to fantasy, according to Tracie Hamersley, senior vice president and associate broker at Citi Habitats in New York City.

"Overpricing often occurs because of emotional reasons," Hamersley says. "So many sellers make the mistake of thinking that their home is special and that a special buyer will pay more because they also fell in love with the property."

The truth is prices have nothing to do with the seller's emotional affinity for the property, and according to Hamersley, it's important sellers understand that as early as possible.

Sellers who bought at the top of the market likely won't see that same price from today's buyers.

"It's a different market," Hamersley explains. "If a seller bought their home during the market's peak, they may have to face the unappealing prospect of losing money on the sale in today's market. This is a difficult position for a seller to be in, but it's one that reflects today's reality."

Home-seller error: Going to a showing
There are a lot of legitimate reasons why a seller might want to be present for the home's showing. But having a seller there tends to sour the experience for most buyers, according to Renee Weinberg of Petrey Real Estate in Long Beach, N.Y.

"Getting the seller out of the house is key," Weinberg says. "Whenever we take a listing, this is explained in advance."

According to Karyn Anjali Glubis, a real estate broker and owner of The Real Estate Expert in Tampa, Fla., sellers are sensitive when buyers nitpick flaws. "Sellers think that every little thing is a complaint against how they may have maintained a property," Glubis says. The reality is that observations from buyers -- though sometimes harsh -- have nothing to do with the person selling the home.

Having a seller present for an open house or the first (or even second) showing tends to stifle potential buyers from expressing opinions. After hearing negative feedback, some sellers reject offers for emotional reasons, Weinberg says. Sellers should use their agents to insulate them from the process, filter relevant information and only meet the buyers when there's a serious offer on the table.

Home-seller errors: Rejecting early offers
Sellers be warned: The longer a property sits on the market, the worse the offers are likely to get, says Nick Jabbour, a New York City real estate agent and vice president of Nest Seekers International.

"Once a property is marketed, it will receive the most attention during the first two weeks," Jabbour says. "(The home is) new to the market, and any buyers that have been in the market for a home will see it come up. If it is priced right, an educated buyer, (who has) been in the market for a while (and) sees the home as a fit, will put a serious foot forward."

Sometimes early bids run the risk of spooking sellers who worry they underpriced their properties. But Jabbour says you can tell the property was priced correctly when an early offer is near the asking price, as long as the asking price is in line with the market.

"Waiting for a better offer is counterproductive and can result in a property languishing," Jabbour says.

Home sellers, don't take offers personally
When you're selling your home, it's easy to take everything personally. But doing so is a big mistake, according to Fiona Dogan, a realtor in the Rye, N.Y., office of Julia B. Fee Sotheby's International Realty.

"Sellers need to become emotionally detached very quickly from their homes," Dogan says. "By its very nature, a real estate transaction is aggressive and confrontational since the seller wants the highest price and the buyer wants the lowest."

That negotiation almost always means a buyer will point out every flaw with the property. But while hearing that information may sting a little, it's really a good sign, according to Dogan, because it means the buyer is serious.

"A seller needs to be ready to hear criticism of their lovely home and be able to deal with it as a negotiating tool and not take it as a personal affront and walk away from a potential sale for emotional reasons," Dogan says.

via bankrate


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The Secret to Getting a Mortgage or Refi Rate Near 3%

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The headlines are buzzing: Mortgage interest rates have dropped to 3.875 percent for a 30-year fixed rate loan. Want a 15-year loan? You'll pay even less, maybe 3.25 percent.

Can you get a 3.875 percent interest rate? First, you have to understand that not every lender offers a loan carrying a super-low interest rate, and only people with the best credit need apply.

But there's more to the story. If you want to land the best loan with the best rate and terms, you'll need two things: credit and cash.

Your Credit
Many borrowers don't understand the direct link between your credit and your loan. The better your credit history and the higher your credit score, the lower your interest rate and the better your terms.
If you've missed some payments – or even if you're only 30 days late on one bill – your credit history is tarnished, your credit score reduced, and your interest rate will be far higher.

Your Cash Outlay
But don't forget about cash. These days, lenders want to see you walk through the door with at least 20 percent to put down on the property. If you don't have at least 20 percent equity (if you're refinancing) or 20 percent in cash for your down payment, your interest rate will be higher.

For example, if your credit score is 760 to 850 and you have at least 20 percent equity, you're in the highest credit tier, which means you might qualify for an interest rate at 3.282 percent on a 30-year fixed rate loan or less than 3 percent on a 15-year fixed rate mortgage.

But if your credit score drops into the second-highest tier (700 to 759), you might only qualify for a 30-year loan at 3.504 percent. To be sure, a loan at 3.5 is still a historically amazing rate. In fact, today's interest rates are so low that you might qualify for a loan below 4 percent even if your credit score is a 660. But you may need to have as much as 50 percent in equity or for your cash down payment.

The right lender
The key to finding a great loan with a terrific interest rate is finding the right mortgage lender to give it to you. But here's where it gets a little sticky. There are plenty of lenders who don't want your business. They might be overweighted with bad real estate loans, or they might not need any loans from people with less than perfect credit scores, even if you have plenty of equity in the property.

But instead of telling you they don't want your business, they'll just quote you an interest rate or loan terms that are, shall we say, less than palatable. By comparison, these quotes will look downright expensive.

Of course, if you don't shop around for a lender, you won't know that you're being quoted an interest rate that's too high or offered a loan program that doesn't make sense for your finances. So talk to a variety of lenders and make sure you understand exactly what you need to do to close on a loan that offers an interest rate for less than 4 percent.

via yahoo homes

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Reasons Your Mortgage Rate is High - and How You Can Fix It

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Wondering why your mortgage rate is so high? It could be a direct effect of what you are -- or aren't -- doing.

Hate shopping?

Don't pay your bills on time?

Rarely keep track of your mortgage payments?

If you answered yes to any of the above questions, your sky-high mortgage rate could be caused by ... you.

That's right, even your personal shopping habits could play a role in how high your mortgage rate is.

But don't despair; there are some actions you can take to potentially help you lower your rate, says Fred Arnold, director of the National Association of Mortgage Brokers.

Keep reading to learn more about reasons why your mortgage rate is so high, and tips to fix it.

Reason 1: You Didn't Shop Around
Unless you're a billionaire, you probably value a good deal. And if you want a stellar bargain on your mortgage rate, shopping around is essential.

In fact, you'll probably want to put your shopping shoes on once you hear this bit of news: failing to shop around -- and not researching the rates of different providers -- could be a reason your mortgage rate is so high.

"A mortgage -- whether it's a home purchase, a refinancing, or a home equity loan -- is a product, just like a car," so you may have the option to bargain with your lender for a better rate, notes the website of The Federal Reserve, the central banking system of the United States.

"Shopping, comparing, and negotiating may save you thousands of dollars," says the website.

Fix-it tip: Compare rates for every company you shop around with, and see who offers the best rate. But that's not all. Arnold says you have to trust your lender, too.

"Shop online to get an idea of average rates, but get quotes from people who are local - people who you can walk into their office and see who they are," says Arnold. "You'll also want to get referrals from someone you can trust."

Reason 2: You Have a Bad Credit Score, And You're Not Doing Anything About It
Unfortunately, having a bad credit score tends to make life harder than it has to be. On top of potentially affecting things like insurance premiums and security deposits, a poor credit score can also affect your mortgage rate.

Why? Because many mortgage lenders view your credit score as a reflection of your financial habits.

Luckily, it's not the only thing used to determine your mortgage.

In fact, "a good credit score is only one of the factors that home lenders look at when deciding whether to lend you money," according to the Consumer Financial Protection Bureau website.

"Just because you have a good credit score does not mean that the lender is going to give you the lowest cost mortgage loan available," adds the bureau, which notes that your debt, income, assets, and savings are other notable factors that a lender may consider when determining mortgage rates.

Fit tip: Don't let your bad credit score hold you back from a potentially lower mortgage rate. Take action to help improve your credit, suggests Arnold.

"One way to improve your credit would be to resolve any collections in a favorable manner," says Arnold. "Try to pay down your debt to 50 percent."

Reason 3: You Didn't Refinance
What's another reason that may be contributing to your high mortgage rate? The fact that you haven't refinanced.

Refinancing: It's a term you've probably heard of, but do you know what it means?

If you answered "no," don't sweat it. Refinancing your mortgage is simply the restructuring of your current mortgage, oftentimes at a lower interest rate and different loan terms.

And as you might imagine, refinancing your mortgage could help ease your purse strings.

According to Massachusetts' Citizen Information Service website: There are several reasons to refinance your home, including the potential "to lower the interest rate on your mortgage; reducing your monthly payments and overall costs."

It also notes, though, that refinancing may not be for everyone, as the refinancing costs may outweigh the savings.

Fix-it tip: To help you figure out if refinancing is the right move for you, you'll want to ask yourself some questions. Massachusetts' Citizen Information Service  recommends the following:

• How much can I lower my current monthly payment?
• How long do I plan to stay in the house after I refinance?
• How much will I pay in refinancing costs?

Figuring out the answers to these questions will help you determine if refinancing could help you save money.

Reason 4: You Have a Long-Term Loan
Are you familiar with the phrase "The sooner you get it over with, the better"? Well, that expression rings especially true when it comes to paying off your mortgage.

Why? Because when you're able to pay off your mortgage sooner, it's likely that the interest rate on your mortgage will take a dip -- and then some.

"Shorter-term mortgages -- for example, a 15-year mortgage instead of a 30-year mortgage -- generally have lower interest rates," the Federal Reserve website says. "Plus, you pay off your loan sooner, further reducing your total interest costs."

As an example of the potential savings a short-term mortgage can yield, the Federal Reserve Board suggests comparing the total interest accrued for a fixed-rate loan of $200,000 at 6 percent for 30 years, with a fixed-rate loan at 5.5 percent for 15 years:

If you need a little help with the math, that's a savings amount of $137,520.

Fix-it tip: Of course, this is only an option if you -- and your back account -- can afford to make higher monthly payments and in effect, pay more of your principal each month. So, you'll want to take a look at your finances and determine how much you can afford to cough up each month. Though you may have to make some sacrifices, it could potentially pay off in the long run.

Reason 5: You Didn't Get Rid of Your Private Mortgage Insurance (PMI)
It sucks to be punished for not having enough money, but unfortunately, it happens.

Case in point: If you were unable to put a 20 percent down payment on your home, you were probably charged a private mortgage insurance (PMI), which protects your lender in the event you default on your loan, notes the Federal Trade Commission's website.

Thankfully, "For home mortgages signed on or after July 29, 1999, your PMI must -- with certain exceptions -- be terminated automatically when you reach 22 percent equity in your home based on the original property value, if your mortgage payments are current," says the FTC.

But did you know that you're actually eligible to get rid of your PMI once you've reached 20 percent equity in your home?

Indeed you can. But there's a catch. Your PMI can only be canceled at 20 percent equity if you request it. Otherwise, you'll be paying it until the 22 percent mark.

Fix-it tip: Pay attention to your payments and balance. Once you notice that your balance is at 79.9 percent of your home value, pick up your cell phone, contact your lender, and tell them to kick your PMI to the curb.

via yahoo homes

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4 Big Money Mistakes of First-Time Homebuyers

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First-time homebuyers almost always make a few mistakes when buying their home. Perhaps they pay too much, choose the wrong type of mortgage or neglect to budget for needed home improvements.

Working with a trustworthy, experienced lender can help prevent such mistakes. But consumers also need to take responsibility for their budgets and choices.

"Before buying a home, consumers need to develop a short- and long-term perspective on their purchase," says Michael Harrison, area director for MetLife Home Loans in Southwest Ohio.

Following are the four biggest financial mistakes of first-time homebuyers:

Spending the maximum on housing
Lenders qualify buyers based on their incomes and debt-to-income ratios without considering how much the borrowers spend on items such as transportation, savings, food and other necessities.

"A lot of first-time buyers are optimistic about the future and excited about buying a home, so they borrow the absolute maximum they can afford instead of allowing themselves wiggle room for a partial loss of income or for future expenses such as children," Harrison says.

Financial experts recommend that consumers decide how much they want to spend each month on housing before meeting with a lender.

"Every buyer should create their own budget and know their limits," says Stephen Adamo, president of Weichert Financial Services in Morris Plains, N.J.

Adamo says many first-time homebuyers experience a sizable change in their housing payments. Some new owners may go from $500 per month in rent to a monthly mortgage payment of $2,000, he says.

"You need to deal with payment shock," Adamo says.

Not getting prequalified early enough
Meeting with a lender for a buyer consultation and prequalification for a mortgage should be the first step toward homeownership. Yet many first-time homebuyers wait until they are ready to start house hunting before contacting a lender.

"It's never too early to set up a free buyer consultation with a lender," Adamo says. "Every buyer needs to get prequalified early enough in the process so that they can make some changes if they need to or correct errors on their credit report."

Some buyers may need to spend up to a year saving more money, increasing their incomes or cleaning up their credit before making an offer on a home.

A buyer consultation should include creating long-term financial goals and strategies for buying property, Adamo says.

Misunderstanding the importance of a high credit score
While most consumers know it's important to have a high credit score, not everyone understands how costly a low score can be.

"All mortgage lending is done with a tier of interest rates and terms based on consumer credit scores," Harrison says. "A credit score of 720 or above will earn you the best rates and can potentially save you thousands of dollars."

A score of 680 to 720 can get you good mortgage rates, while a FICO score of 620 is usually about the lowest score to qualify for most loans, Harrison says.

Consumers should learn about credit scores the minute they start working, Harrison says.

Websites such as Bankrate provide information about how to improve your credit score.

Even after a mortgage approval, consumers must avoid applying for new credit or taking on new debt, Adamo says, because a second credit check is often required before settlement.

Choosing the wrong mortgage product
First-time homebuyers today typically opt for a 30-year fixed-rate mortgage. Their conservatism is a reaction to stories about the dangers of interest-only mortgages and adjustable-rate mortgages.

But Harrison says home loan alternatives to a 30-year-fixed sometimes make more sense. For example, buyers certain they will be relocated by their companies within five years may find a 5/1 ARM "could be a much better mortgage," he says.

"There's no reason to pay a premium for a product you don't need like a 30-year loan," Harrison says.

Homebuyers eager to build equity in their homes or who are older and want to live mortgage-free in retirement should consider a 15-year fixed-rate loan or, if they can afford it, even a 10-year mortgage to reach their goals.

via bankrate

 
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How to Cut Your Air Conditioning Bill

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When temperatures rise outside, it's natural to seek cool shelter indoors. For many people, that means flipping on the air conditioning unit and taking it easy. Keeping the air cool is more than a luxury for some families; elderly parents and young children cannot tolerate excessively high temperatures. However, the need for air conditioning puts many families at financial risk. A pricey combination of rising fuel costs and high electrical demand make summertime electric bills hard to manage.

According to Energy Star, the American family pays nearly $1,000 a year on heating and cooling their homes; that figure is above other electrical costs! You don't have to risk exposing your loved ones to brutal heat to save money. Take advantage of some money-saving tips and beat the summer heat.

• Help circulate cool air through the home by placing an oscillating fan in family rooms, like a living room or dining room.
• Keep the temperature at constant temperature and avoid dropping the thermostat too low. Lowering the temperature costs you money and won't cool the home any faster.
• Raise the thermostat 2 to 3 degrees before you leave for work if no one will be home. The energy experts at APS say that moving the temperature up 5 degrees for eight hours a day can save you $3 to $5 a month.
• Install a whole house fan system. Whole house fans pull the hot attic air out of the home and keeps the air circulating, giving your home a cooling effect. This move could chill your home by a few degrees.
•  Replace old air conditioning units. If your window unit is a decade old, it needs to be replaced with an energy efficient unit. If your home has central AC, have the thermostat calibrated and the system charged yearly. APS says homeowners should replace their older SEER units (Seasonal Energy Efficiency Ratio) to save energy bucks. Replacing a unit with a SEER rating of 10 with one that has an 18 SEER rating you could save up to 50% on your AC costs annually.
•  Change the air conditioning filters regularly; once a month is suitable. Good air flow across the filter will cut down on cooling costs and stop allergens from floating around your home. FPL Energy Services say that air filters cost between $10 and $25 a piece, but replacing them can save you 5 to 15 percent on your monthly bill.
• Hang insulated curtains in your windows. Sheer curtains look nice, but they don't provide any barrier between you and the outdoor heat. Keep windows covered during hot afternoons.

Also, do a walk through of your home while the air is on. Check for leaks around windows and doors. Sometimes your energy dollars simply float out the window!

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What To Know Before Buying A New Home

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Search New Build Homes For Sale in Gilbert

Buying a new house brings up different issues than buying a pre-ownedt home. You have access to more information on the building materials and systems than a subsequent buyer. But unknowns lurk: What will the completed neighborhood look like? Will it include all the features promised in the brochure?

Bottom line: Buyers need to research a different set of questions before making an offer on a new house.

If you're vowing "out with the old and in with the new" as you shop for a home, here are six tips to help you make a smart buy.

It's easier to get custom features
You love the house, except for the wallpaper in the powder room or the carpet in the den.

You might be able to persuade the builder to change a few things before you move in, says Stephen Melman, director of economic services for the National Association of Home Builders.

With an existing home, alterations are often negotiated with the seller, he says. That can be uncomfortable. But with a new home in an unfinished neighborhood, the labor and materials are still on site, so "it's no big deal," he says.

Most builders are flexible and provide a greater range of choices in things such as appliances, flooring and paint -- "the kind of choices that didn't exist 10 years ago and weren't common five years ago," Melman says.

If your changes aren't finished by the time you close, "it's probably a really good idea to escrow some money" so the builder has incentive to do the work, says Ron Phipps, immediate past president of the National Association of Realtors and principal broker with Phipps Realty in Warwick, R.I.

You could have additional options for financing
Builders often work with banks and, as a result, may be able to offer financing options, says Melman.

So, while you still want to get prequalified with a lender of your own choosing before you start shopping for a home, it makes sense to weigh all of your options. And you can always try to use the offer of builder financing to drive a better deal with your own lender.

Builders can't require you to use their banks. And don't automatically assume that builder-arranged financing will be a better deal, Phipps says. Always shop around and compare terms. "And if someone doesn't want you to do that, your antenna should go up," he says.

It's still a buyer's market
Shoppers are used to being in the driver's seat when it comes to the price on a previously owned home. But that same market will also help them get a good deal on a new home, Melman says: "The market speaks."

"There is such price pressure on the builder," Melman says. And that can help buyers negotiate a better price on a new home. "Prices haven't been this low in years," he says.

That said, buyers can often get a pre-owned home with the same square footage and number of bedrooms and bathrooms for less money than a new one, he says.

Phipps says that with a new home, "you're starting fresh, its economic life is longer, you get to personalize it, and you don't have to undo what that other person thought was important." You get the latest in technology and systems, "but there's a cost involved in that," he says.

Where you'll also likely save some money? Those power bills. Those new appliances and systems often equate to lower power bills, too, says Barry Zigas, housing policy director for the Consumer Federation of America.

Read (and understand) your warranty
A warranty often means the builder will come back and fix problems, Melman says. "You're not going to have that in an existing home."

Zigas recommends you find out exactly what that warranty covers, the remedies it offers and how long it's valid.

Warranties vary widely, so read the fine print, says David Jaffe, vice president in the office of the general counsel for the National Association of Home Builders.

Typically, warranties run from as little as one year to as many as five years, he says. It's as important to understand what the warranty doesn't cover as it is to know what the warranty covers, he says.

It's critical to know who backs the warranty, Jaffe says. It might be the builder, or it could be a third-party company, he says.

The contract might include an arbitration clause
Some builders include arbitration clauses in contracts, in which buyers give up their rights to file lawsuits. Instead, buyers have to use a dispute resolution process designated by the builder.

Not all builders use arbitration clauses, Phipps says. Find out if it's in the contract.

While arbitration can be a quicker and less expensive way to solve problems for buyers, much depends on how the arbitration is handled and who picks the arbitrators, Zigas says. Check the track record of the arbitration company if one is specified, he says. Does it have a reputation of being consumer-friendly?

Also, make sure you can seek arbitration in your own city or state, Phipps says.

If you don't favor arbitration, you have several choices, Jaffe says. You can choose another builder, buy a pre-owned home or ask that the arbitration clause be removed from your contract, he says. "For the most part, all the provisions in that contract are going to be negotiable."

Before you sign a contract, it's smart to have your own lawyer review all the documents, Jaffe says.

Amenities to come? Get it in writing
If you're buying in a community built around certain amenities -- such as a pool, golf course or tennis court -- that's part of the value of your purchase, Phipps says. If the amenities are still on the drawing board, do a little due diligence if you're banking on their completion, he says.

"Anything that involves new construction or phased development means you're at risk of the developer running out of money," Zigas says.

Phipps says many municipalities require builders to post bond for yet-to-be-built shared amenities. You can find out if this has been done by asking the local building department, an agent you trust or an attorney.

Zigas recommends Googling the builder and visiting the builder's other, previous developments. And if the neighborhood requires dues, find out who picks up the tab for unsold or undeveloped property in the community, he says.

via bankrate

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5 Easy Ways to Get a Greener Home

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Forget a fleet of solar panels (for now). These ideas can make your home a whole lot greener when money or time is in short supply

When you hear the term "green building," you might first think of solar panels on the roof or compact fluorescent (CFL) bulbs. Then you might start to think of bigger concepts, like walls built with straw bales. But while CFLs definitely have their place in every home, and straw bale walls are great for insulation in some applications, solar power is one of the last things you should think about.

First, you should shrink your home's energy use as much as possible, manage your light and heat gain and loss, make sure you have good air quality and check to ensure that you have well-maintained surfaces inside and out. Then crown your green masterpiece with a photovoltaic array. It's important to prioritize your wants and needs during a green remodel, as with any other project. Here are five places to start.

1. Buy a bath fan. What's the most important thing in a bathroom? It's hard to argue with a toilet and some running water. But after those (and before you add a shower), you need a bath fan. I'm amazed at how many bathrooms I go in that don't have one. A window is not enough, and a small noisy fan that nobody wants to turn on is not going to do you any good.

Buy a good, quiet bath fan, and if it doesn't have an occupancy sensor, wire it with a separate timer switch. A fan should run for at least 10 minutes after you leave the room for odors and 20 to 30 minutes after a shower. Make sure it vents to the outside. Though it's important to have a certain level of moisture in the air in your home, it's not good to have it all in one place. Vent your bathroom and your paint will last longer, you won't run the risk of mold growth and cleaning will be easier.

2. Manage the light. Managing the light that enters your home is a way to save on utility bills and make your home a more cheerful place. Strategically placed awnings and roof overhangs can help you do this. In the summer, when you don't want as much light or heat, the sun is higher in the sky. Because the light hits your house at a steeper angle, the same awning that blocks out light in the summer will allow the low-angled winter light in when you need it most.

The awning pictured here serves another purpose. Because it is set down below the top of the window, it reflects light up onto the ceiling inside, creating a nice ambient glow inside instead of a glare.

Another great way to get light into your home without bringing in a lot of unwanted heat is to install a solar light tube. These capture the low-angled winter light using reflective coatings within a roof-top dome, and are much easier to install than a skylight since they require no structural headers. Also don't feel limited to rooms right below the roof. The reflective tubes can be run down from the second floor to the first floor though closets or thick walls, and they can even make slight turns.

3. Insulate. If you spent a lot of money getting the most efficient windows you could afford, don't let the heat escape all around their sides.

If you've ever used a can of foam, however, you know it can be a tricky, messy process, and some is inevitably wasted when the can dries up. So if you have a lot of foaming to do, invest in a foam gun. The foam doesn't dry out, and you can control the flow rate, which means the application process will be less messy and less wasteful.

Once you seal up your house with foam and caulk, you don't want to trap harmful pollutants inside. Indoor air is generally much worse for you than outdoor air, so don't make it worse by using home improvement products that release volatile organic compounds (VOCs) into the air.

Most of you have probably heard of no-VOC paints. But what about the painter's caulk? I've tried many "green" caulks, and most are not as easy to use as standard painter's caulk. This product from Geocel is solvent free and VOC free, and it works great.

4. Use reclaimed materials. Most metropolitan areas now have several architectural salvage shops. While materials made from recycled materials are great, remember that it's reduce, reuse and then recycle.

Reclaimed materials are a great way to reuse. Go to your local salvage yard and think creatively. Here a wall is dressed up with old boards, some with the original paint on them. Reclaimed doors, light fixtures and tile are all great ways to give a space character. Don't be afraid to use something for a purpose other than what it was intended for; my coffee table at home is made of an old exterior shutter.

I know what you're thinking: "Kenny, you just got done telling me not to let my airtight home be filled with VOCs, and now you're telling me to bring crusty old building products into my house and leave the old lead paint on them for charm?"

Yes, but there's one more step. If you want to safely coexist with surfaces that may be covered in lead paint (and any painted surface from before 1978 should be considered a risk), you can encapsulate the lead by using a product like this one from Nansulate. It has a very low level of sheen, so you won't even know it's there. And you can get that rustic look without endangering your family.

5. Choose quality materials. Finally, think about every aspect of your project with that first "r" — reduce — in mind. We're currently renovating a house in Philadelphia built in the 1700s. The floors are original; the plaster is original; the brick front is original. By using materials that last, such as brick, we reduce the number of times a home needs to be renovated. And that means less waste and less energy used making new materials (and less work for contractors like me). Of course, there will always be work building for a growing population and serving people's changing needs and tastes. I just hate tearing out a cheap floor that lasted only 10 years.

via houzz.com

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