Top 8 Tips For Remodeling Your Home

Remodeling can make you fall in love with your home all over again, but home renovations are hard work! Keep these tips in mind to help you along the way.

1. Assess The Condition Of Your Home

Home renovations may reveal some unforeseen problems which can put the updates behind schedule. Understanding the conditions of your home’s electrical wiring, plumbing, and foundation is important for planning your renovations. Simple changes like adding an outlet may require a complete rewiring of your home. 

If you ever blow a fuse in a certain room when using too many appliances, this can be a sign that you need to upgrade your electrical system. A good contractor will tell you if certain designs may not work with your home’s existing features, so make sure to listen to their input before you begin.

2. Leave Room In Your Budget

Try your best to research the costs of materials and labor to get an estimated budget. A contractor can look over your budget and let you know if it’s reasonable. Oftentimes, you’ll have a solid budget in mind, but unexpected changes can end up costing more while the renovations are already underway.

3. Prioritize Your Changes

You should think long and hard about the timing of your renovations. Trying to squeeze several renovations in a short period of time isn’t the best way to go. You should also think about which updates will be the biggest splurges so you can weigh your options. For example, it may be worth it to spend more money updating the kitchen while putting the living room upgrades on pause.

4. Hire A Trustworthy Professional

It’s better to spend more money hiring someone who knows what they’re doing than to cut costs and put your trust into an inexperienced builder. It’s a good idea to interview multiple contractors before making a decision. 

Consider checking their licenses, certificates, and client reviews. Make sure you get along with your contractor, and choose someone who understands your vision. Also, make sure to get their proposed plans in writing, as well as a breakdown of the costs.

5. Don’t Believe What You See On TV!

Home improvement shows can mislead you when it comes to expenses. Remodeling costs can vary by location, timing, and your home’s existing features. You should also be careful about getting ideas from television or social media. For costly renovations, it’s best to opt for more timeless, classical designs. If you go the trendy route, then your home upgrades may not stand the test of time.

6. Pick New Features In Person

When it comes to materials such as lighting fixtures or countertops, you should pick these out in person. Make time to visit sample stores so you can visualize how these additions will look in your home. For new materials and appliances, understand that there may be delivery issues or delays. It can be frustrating to have a newly-renovated kitchen, just to wait an extra month for your oven to arrive.

7. Check Local Building Permits

Your local building department should issue home renovation permits. This means that a building inspector has checked that your home improvements follow local ordinances and building codes. For major changes like removing a load bearing wall or adding a deck, you may need a building permit beforehand. Check your local government’s building codes for more information.

8. Prepare For A Not-So-Pleasant Remodeling Period

Home renovations are hard work! A lot of inconveniences will come up during construction like dust, noise, and not being able to use certain rooms in your house. This is partly why timing out your renovations is important. While undergoing renovations may get frustrating at times, try to stay positive and look forward to the final result. After everything is said and done, the finished product will make you love your home even more!

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Top 7 Ways To Increase Your Home’s Value

Every homeowner wants to get the most out of their investment. Keep these tips in mind to help boost the value of your home.

1. Update Your Kitchen And Bathrooms

Most homeowners know that the kitchen and bathrooms are the most important areas to renovate when it comes to raising your home’s value. If you’re not ready for a full remodel, consider making simpler changes. For example, upgrade your kitchen appliances to newer, more energy efficient models. Also, replacing lighting fixtures and floor tiles can easily transform your bathroom.

2. Opt For Lighter, Neutral Colors

As opposed to bold choices like red or purple, neutral colors are generally more marketable. If you’re painting your walls, lighter colors are better for making a room look larger than it is. You may choose to save money by painting the walls yourself, but don’t expect it to be easy to do on your own. Properly painting a wall takes patience and attention to detail.

3. Cut Down On Energy Costs

Energy efficient upgrades are great for saving you money while also increasing the value of your home. You can request an energy audit to learn about the best ways to make your home more energy efficient. Some examples of energy saving updates include: using a programmable “smart” thermostat, sealing up leaky doors and windows, installing ceiling fans, and upgrading your lighting to LED bulbs.

4. Invest In Low Maintenance Landscaping

If you live in a dry climate, consider your xeriscaping options such as hardy, native plants that don’t need a lot of water. If you absolutely love your flowers, shrubs, and grass, you should invest in a sprinkler system with a programmable clock. These irrigation systems can keep your plants from either drying out or getting over saturated.

You may choose to invest in landscape renovations that add enormous value to your home. New features like mulch beds with plantings, walkways, paver patios, and retaining walls can transform your yard into a more beautiful and functional outdoor space.

5. Replace Old Carpets And Maintain Your Hardwood Floors

Carpets generally need to be replaced within 5-15 years after installation. If your carpets look worn down despite regular vacuuming and steaming, then they probably need to be replaced. Hardwood floors, on the other hand, last much longer than carpet. However, you need to maintain your hardwood floors by using non-abrasive cleaning solutions and getting them rebuffed every couple of years.

6. Hire An Inspector

It’s hard to notice every last issue in your home that may cause serious problems down the road. The first step to preventing damage to your home is knowing if something is broken. Hire professionals to inspect for problems such as deterioration to your roof, termites or pests, outdated electrical systems, or hidden water leaks. A professional may notice significant problems that you simply cannot see. The longer you put off fixing these issues, the more expensive it’ll be to repair them later on.

7. Keep Up With Regular Maintenance And Repairs

Regular maintenance is absolutely essential for preventing major damage to your home. If you don’t keep an eye on small items like fixing leaky faucets or caulking your bathtub, these minor issues can lead to big problems later on. After hiring a professional to inspect your home, you’ll have more insight on how to keep up with regular maintenance. 

A great tip is to have a maintenance checklist handy to keep you on track throughout the years. Also, you should put together a list of trustworthy maintenance and repair companies BEFORE you need them. Having these companies plugged into your phone’s contacts means not needing to scramble to find help when an issue does come up.

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Top 10 Most Common Mistakes That Lower Your Home’s Value

Protecting your home’s value is a big deal. Take note of these common homeowner mistakes so you don’t have to learn about them the hard way!

1. DIY Projects Gone Wrong

Not everyone is a pro at home renovations. But you’d be surprised at how many aspiring carpenters have tried installing decks in their backyard, just to cause damage to their home while costing themselves A LOT of money. Even simpler projects, like painting your kitchen cabinets, can take more work and patience than you might think. Don’t underestimate what really goes into making these improvements.

2. Offensive Odors

Oftentimes, bad odor can warn us of a serious problem such as mold. When it comes to mold, you need to hire a professional who can address the problem, as mold can cause serious health concerns. Another major health concern to avoid is smoking inside, as this will leave permanent stains and smells that greatly decrease your home’s value.

If you have pets, it’s crucial to properly clean your home to keep pet smells from sticking around. However, you do not want to just cover up smells with harsh chemicals. Baking soda is a spectacular way to get rid of odors. Just sprinkle some baking soda on rugs or furniture, let it seep in for a few hours, then vacuum!

Keep your home smelling fresh by stopping odors at their source, along with using proper cleaning habits. It’s also a good idea to get fresh air flow by opening some windows and turning on a fan. You can even invest in an air purifier, which is a HUGE game changer, especially for pet owners!

3. Leaving Your Entryway In Disrepair

An entryway is a major focal point to your home’s exterior. An old, worn out door with cracked paint sends the wrong message to your neighbors. Consider updating the hardware, adding a fresh coat of paint, or even replacing the door altogether. You can even plant some flowers or shrubs leading up to your new door!

4. Bad Landscaping/Yard Maintenance

When updating your landscaping, make sure to plan for the future. For example, if you’re going to plant more trees in your yard, think about how they will look in 20 years. Planting trees or shrubs too close to the driveway can cause major problems with overgrown roots.

It’s best to choose plants that are native to your local environment. Getting new plantings to establish their roots in your yard isn’t easy. Most plants need about a year to get established before they can really start to bloom. 

A poorly-maintained yard kills your curb appeal. Think about what landscaping additions will be easier to maintain in the long run. If you live in a dry location where it’s difficult to grow grass, consider some hardscaping updates like paver patios or walkways. These investments can transform your outdoor space, adding tremendous value to your home.

5. Not Maintaining Your Wood Floors

Who doesn’t LOVE shiny hardwood floors?! Having hardwood floors is great for your home’s value, but they need to be properly maintained. Using abrasive cleaning solutions on your floors can actually wear down the wood over time. Also, wood floors need to be rebuffed every couple years.

6. Trendy Renovations

It’s one thing to hang a unique painting on your wall, but installing a statement-making wallpaper in your bedroom may not stand the test of time. For more complicated updates that aren’t as easy to replace, it’s best to stick with classic, timeless designs.

7. Settling For Older Appliances

If you’re using an old dishwasher that can hardly get the job done, it may be time for an upgrade. Older appliances tend to be less energy efficient, potentially costing you more money on your utility bills. Updating appliances such as your dishwasher or oven is a simple way to add value to your home. Not to mention, nicer appliances make cooking and cleaning a piece of cake!

8. Letting Go Of The Small Stuff

From broken light switches, leaky faucets, to squeaky doors and more. These minor issues may not seem like a big deal, but they can seriously add up over time. Something as simple as clogged gutters can lead to bigger problems such as water damage. Keep up with regular maintenance to avoid expensive repairs in the future.

9. Choosing Surfaces That Are Difficult To Clean

If you renovate your home, you need to be careful about the materials you choose. When updating your kitchen or bathroom, think about materials that can easily be cleaned. If you permanently stain a kitchen counter, the whole thing may need replacing!

10. Not Maximizing Your Space

Creating the illusion of more space can increase your home’s value. But too many homeowners opt for cluttered decor like heavy, dark curtains or clunky furniture. Also, if you’re updating a small space such as a bathroom, use larger shapes in your designs to create the illusion of space. Thousands of tiny tiles can make a bathroom look more cramped, whereas larger bathroom tiles can really open up the space.

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Home Improvements That Will Save You Money Long Term

Whether it’s a simple fix or a major upgrade, there are many home improvements you can make that could save you thousands of dollars every year. 

Reduce Your Heating And Cooling Costs

Generally, heating and cooling make up a large amount of your household’s energy use. Small changes to these systems can rack up big savings long term. For example, installing a programmable thermostat for when you’re away. Also, simply insulating your attic will greatly cut heating and cooling costs, adding up to around $600 in savings each year! 

A lot of homeowners know to seal up doors and windows so they don’t let air out, but you should also get your ducts sealed, as small leaks can allow 30% of cool or warm air to escape. Other ways to save money on A/C: strategically plant shade trees to cool your house in the summer, and you can also install ceiling fans as a cheaper way to cool down.

Cut Down On Energy Costs

In addition to heating and A/C, there are other ways to reduce your energy usage and save money on utilities. If you’re still using incandescent bulbs, you should seriously consider upgrading to LED. This lighting option lasts longer than incandescent bulbs while using less energy to illuminate your home. Also, upgrade your older appliances to newer, more energy efficient models, as this will save you money on utilities while also improving your home’s value.

Reduce Water Usage

There are plenty of simple tricks to save money on water. For example, fix leaky faucets and running toilets, use a low-flow shower head, and replace an old washing machine hose. These small changes are proven to add up over time.

Besides just these simple tricks, you should also rethink your landscaping. While a large patch of green grass looks lovely, it can be hard to maintain and expensive to water. Consider trading in your grass for xeriscaping. This means replacing your grass with hardy, native plantings that don’t need as much water. 

If you can’t part with your grass, you can install a smart sprinkler system. These systems come with sensors that know exactly how much water your grass needs, which is a great way to keep your beautiful lawn from getting over-watered.

Invest In Bigger Upgrades

Certain home improvements may cost a lot upfront, but then end up saving you money in the long term. Installing hardwood floors is a splurge that’s probably worth it in the end. Compared to carpet, hardwood floors last much longer if they’re maintained properly, and they’re also great for boosting your home’s value. 

In addition to hardwood floors, you may also consider replacing your roof. Obviously, this isn’t a simple fix, but replacing your roof can save you money on homeowner’s insurance. A stronger roof means more protection from severe weather. (Plus, an energy efficient “cool roof” will reduce your A/C costs.) You can also save money on homeowner’s insurance by setting up a home security system.

Prevent Damage Before It Happens

It’s easier and cheaper to prevent damage than to fix it after the fact. Make sure to keep up with regular maintenance so that smaller issues don’t lead to big problems down the road. When preparing for the worst, you should put together a list of reputable maintenance and repair companies. Having these companies on hand means not needing to search for them last-minute. 

Electrical problems can cause a fire hazard, so you should have a professional come and inspect your electrical wiring, cords, and outlets. Some red flags to look for: exposed wire, spliced wire that’s connected with electrical tape, multiple extension cords, or overloaded power strips.

To prevent serious water damage, consider installing a leak detector system. These systems monitor the flow of water through your pipes and alert you of potential issues before they occur (such as freezing pipes or overflowing bathtubs). Some leak detectors can be programmed to your smartphone, which is definitely useful when you're on vacation.

Another way to prevent water damage, caulk your tubs and showers to stop water from escaping and causing mold. You should also check the drainage outside your home. After a heavy rain, walk around your house to see if any water is flowing toward your home. If this is the case, you may need to call a professional to assess the situation and prevent flood damage from happening.

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Top 8 Landscaping Tips To Increase The Value Of Your Home

A beautiful landscape can add tremendous value to your home. However, it’s important to make the right decisions when updating your landscaping, as a poorly maintained yard can kill your curb appeal.

1. Think about how you’d like to use your outdoor space

Do you wish you had a patio with seating so you could throw more BBQs? A firepit where you and the kids can roast s’mores in the winter? Or maybe you just want a prettier front yard to impress your neighbors. Visualizing your life in a new yard is important for making honest decisions about the best updates for you.

2. Set aside a budget

Because of the high costs of both materials and labor, landscaping can get pretty expensive. Simple changes, like planting a few flowers or shrubs, are more manageable. But major renovations, such as adding decks, patios, walkways, or mulch beds, can get pretty pricey. If you’d really love to transform your yard into a functional and beautiful outdoor space, then investing in these big updates can definitely be worth it. Just think about your budget before getting too carried away. Some landscape construction companies require a minimum budget of $5,000.

3. Hire a reputable landscape designer

Landscape design is both an art and a science. For homeowners who are serious about their landscaping, you should look to a professional who can evaluate your needs, design a beautiful landscape, and bring that design to life! Landscape designers generally work with a construction crew. When choosing a landscape designer, make sure to look at online reviews and pictures of their work. Also, read their warranty carefully and ask questions so you don’t run into any issues months or years down the road.

4. Use the winter months to your advantage

A lot of homeowners neglect their landscaping until the warmer months. However, fall and winter are the perfect time to think about hardscaping additions. Hardscapes are any of the nonliving features that add to your yard. For example, walkways, paver patios, retaining walls, sitting walls, even fire pits! The colder months are a great time to redesign your hardscape features, before you think about adding new grass or plantings to your yard.

5. Balance hardscapes with softscapes

In contrast to hardscapes, softscapes are features having to do with the living components of your yard (plantings, grass, mulch beds). A nice balance of hardscape to softscape can make your yard both beautiful, functional and easier to maintain. While it’s tempting to want to plant lots of colorful flowers, it’s harder to maintain these softscape features. On the other hand, hardscape features like paver patios are low maintenance. If you absolutely love greenery, think about balancing plantings with hardscapes to create a beautiful and practical yard.

6. Choose plants that are native to your local environment

If you work with a professional, they will likely steer you away from plantings that probably won’t make it. It takes about a full year for new plantings to establish their roots in your yard. Don’t be surprised if your rose bushes aren’t in full bloom during their first spring, as new plantings will go through a dormant phase while they get established. Choose native plants and follow the maintenance instructions to give your plantings the best chance of thriving.

7. Be strategic where you plant trees

If you decide to plant trees, think about how they will look in 20 years. Planting too many trees, or placing them near the driveway can cause major issues with roots overgrowing. If you’re unsure about where to plant new trees, talk to a professional who can help.

8. Understand your plantings and irrigation system

A good landscaper will give you clear and detailed information about maintaining your plantings and irrigation system. You will need to adjust your irrigation at the start of each season. Understanding your irrigation is important so you don’t over-water or under-water your plantings.

Overall, you may just be looking to spruce up your yard a bit, or opt for an outdoor renovation. As long as you understand your landscaping and keep up with maintenance, these upgrades can definitely increase your home’s value.

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The 7 Best Ways To Maximize Space In Your Home

Not only does a cramped and cluttered space add a lot of stress to your daily life, but it can also lower your home’s value. Here are some tips to maximizing the space in your home.

1. Open up your entryway 

The very first room your guests enter should feel welcoming and spacious. Unfortunately, with shoes, mail, and packages, the entryway can get messy pretty quick. Using a bench with shoe storage helps keep this space tidy. Also consider getting sorting baskets for your mail, along with decorative recycling/garbage bins to keep spam mail from stacking up.

2. Use your vertical space

Raising items upwards makes your ceiling feel higher, while freeing up floor space. Some ways to use your vertical space: an adjustable TV mount, taller cabinets and bookcases, installing a floating laptop desk that folds up into the wall, mounting hooks for coats and hats, even raising your curtain rods above your windows.

3. Try customized storage

Customized storage solutions make the most out of your home’s unique layout. Many homeowners install items such as built-in cabinets under their window sills, mounted shelving in the garage, mudroom benches with pull-out drawers, bookcases under the stairs, the options are endless! Adding in these storage solutions can utilize every last inch of extra space in your home.

4. Use neutral colors and add texture

Features like dark, heavy curtains can shrink your living room space. But lighter, neutral colors complement the lighting to make your home feel larger and more inviting. It’s also important to add texture to your decor to give your rooms more depth. For instance, macrame wall art can create texture without adding clutter.

5. Use mirrors and lighting to your advantage 

Investing in some large mirrors is known to create the illusion of more space. In fact, large round mirrors are especially helpful at reflecting light so as to open up a room. Also, for smaller spaces like a guest bathroom, installing brighter lighting can actually “widen” the space. The darker the room, the smaller the space will appear.

6. Choose furniture that serves multiple purposes

Investing in nice, multipurpose furniture can transform a cluttered space! For instance, an ottoman with hidden storage, or an end table with decorative baskets attached. There are infinite storage solutions available. But remember, it’s important to make every piece count, so think carefully about how you’ll use new furniture before you buy.

7. Think big 

While it may be tempting to display your favorite knick knacks on your shelf, the more small items you display, the more cramped your home will feel. The same goes for decorative installations such as your bathroom tiles. Fewer, larger tiles in your bathroom will maximize the space better than if you opt for crowded, intricate shapes. 

Also, oversized artwork can actually create the illusion of more space. Large-scale decor can add a stunning impact and make a room seem bigger than it actually is. Overall, when decorating your home, you should opt for larger, fewer pieces over more crowded and intricate designs.

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How To Prepare For A Home Refinance

There are many potential benefits to refinancing your home. However, it’s a good idea to prepare yourself for this process, so you can have the best experience possible.

1. Know Your Why

Understand your end goal for why you want to refinance. Are you looking to lower your interest rate, reduce your mortgage payments, tap into your home equity, or shorten the term of your home loan? Knowing exactly why you’re looking to refinance is important for weighing the pros and cons of your different refinancing options.

You should also think about potential changes in your future income. For example, if you’re looking to retire in a few years, then your income may decrease. In this case, you may not want to take on a financial burden that will be difficult to handle in the future. 

2. Get Your Finances In Check

Your financial situation can affect whether you qualify for a refinance. The better your finances, the better options you may have available to you. As an example, if you have a higher credit score, you may be able to get a lower interest rate. Make sure to avoid any missteps that might harm your credit such as taking on excessive credit card debt, closing out unused credit cards, or not checking your credit score for errors that you can dispute. 

Do your best to reduce any monthly debt payments that you can, as your debt-to-income ratio may also impact your refinancing options. You also want to keep your household finances as stable as possible. Any decrease in income or large purchases may complicate the refinancing process.

3. Talk To A Mortgage Professional

While it’s important to research the different types of refinancing options, you should speak to a professional who can look at your unique situation and help you choose the best course of action for you. You may decide to work with the lender who helped you with your original home mortgage, as this person could have a better understanding of your circumstances and future goals.

When choosing a mortgage professional, it’s best to get a second opinion as rates and fees can vary from lender to lender. Once you begin working with your mortgage professional, they’ll fill you in on the next steps and let you know what all paperwork to gather.

4. Prepare Your House For An Appraisal

For most refinances, you will need an appraisal to calculate your home's market value. This appraisal will determine how much equity you have in your home. The more equity you have, the better, because this may help you get a lower rate. For a cash out refinance, your home equity will affect whether you qualify, as well as how much money you can take out.

Do your best to make general improvements to your home, keeping up with regular maintenance. Most importantly, you should address any potential health or safety issues. For example, making sure smoke/carbon monoxide alarms are in order. If the appraiser notices any safety hazards, this can delay the appraisal process and cost you more in fees.

In addition, you should prep your home as if you’re about to sell it. Making necessary repairs, reducing clutter, sprucing up the landscaping, and deep cleaning to make your home look presentable. Even minor cosmetic changes can add up. 

All in all, preparing for a home refinance may seem a bit overwhelming at times. But taking these necessary steps can make the refinancing process run a lot more smoothly.

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Top 6 Common Mistakes To Avoid When Refinancing Your Home

There are several potential benefits to a home refinance. But all too often, homeowners make these common mistakes when refinancing their home. Read up on these mistakes now so you know what to avoid in the future.

1. Harming Your Credit Score

As you prepare to refinance, you’ll want to get your finances in order. Sudden changes in your credit score, like taking on excessive debt or closing any unused credit cards, can harm your credit. The higher your credit score, the better chances you have at getting a lower rate. Make sure not to make any large purchases or other changes that might lower your score.

2. Not Getting A Second Opinion

When looking at your refinance options, it’s best to get a second opinion. Rates and fees can vary from lender to lender. You want to choose the mortgage professional who can get you the best value on your refinance, along with someone who is open and honest about helping you make the best decisions for your unique situation.

3. Focusing Too Much On The Rates

While rates do play an important role for your refinance, they don’t paint the full picture. If you focus too much on changing interest rates and try to time out your refinance according to rates, then you may miss the mark completely. Also, you want to think about the overall benefits and value of your refinance options.

4. Not Protecting Your Home’s Value

Most refinances require you to have your home appraised. So you’ll want to do your best at protecting your home’s value. Not keeping up with regular house maintenance, letting your yard get overgrown with weeds, or DIY renovations gone wrong can significantly harm your home’s value.

5. Overlooking “Junk Fees”

Read the fine print before agreeing to pay irrelevant fees. Application and title fees are reasonable. But “junk fees” include things like “document preparation” or being charged too much for something as simple as obtaining a credit score. When getting a second opinion, keep an eye out for any fees that seem suspicious.

6. Taking Out Too Much Equity

While tapping into your home’s equity can be great for renovations, paying off credit card debt, or even going on vacation, it’s not a good idea to take out too much of your home’s equity. You want to keep a cushion of equity to protect you in case housing prices fall.

It’s important to do your research and understand how to have the best experience possible when refinancing your home. However, you should always speak to a trusted professional who can assess your unique situation, your future goals, and help you make the best decisions for you.

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Different Types of Mortgage Loans

Purchasing a home is a significant life event and the first step in building wealth for most people in the United States. Before moving forward on something this monumental, it’s essential to understand the different types of mortgage loans and which one is the right one for you.

Common types of mortgages loans

There are several types of house mortgages available, and each has its benefits. Individual circumstances can determine which works best for the situation. Here is a brief overview of each type of mortgage loan.

Fixed-rate mortgages

A fixed-rate mortgage is also known as a ‘traditional mortgage.’ This is the most commonly used mortgage and offers a fixed interest rate locked in for the loan’s entire term. 15-year and 30-year fixed-rate mortgages are by far the most popular in this category and allow a homeowner to have a clear expectation of what’s owed each month.

Pros of fixed-rate mortgages

• A fixed-rate mortgage is popular with the general public as it offers stability and predictability.
• It is a good choice for people holding the property for the long term.
• The principal balance can rapidly be reduced.

Cons of fixed-rate mortgages

• If market interest rates fall, a homeowner may be paying more on their loan than other homeowners.
• It may be locked in for a set amount of time, making refinancing difficult down the road.

If you plan to stay in your new home for at least ten years, a fixed-rate mortgage is an excellent option. Its predictability will allow for easier budgeting, and the fluctuating interest rates won’t amount to much over time.

Adjustable-rate mortgages

An adjustable-rate mortgage (ARM), also known as the ‘floating rate mortgage,’ is the opposite of a fixed-rate mortgage. An ARM offers an interest rate that fluctuates with the market. Monthly payments can go up or down, depending on the current interest rate. The most popular of the adjustable-rate mortgages is the 5/1 ARM. The introductory interest rate is locked in for the first five years (this is the 5), then will change every year (this is denoted by the 1).

Pros of adjustable-rate mortgages

• An ARM can help you build equity in the home more quickly if rates become lower.
• Using an ARM can help you qualify for a larger loan, and therefore a “better” house.

Cons of adjustable-rate mortgages

• These loans are riskier than a traditional mortgage, as interest rates may go up and cause you to pay more.
• Because the payments are not predictable, it’s more difficult to fit into a long-term budget plan.

An ARM mortgage is a good choice for someone who isn’t planning on living in a home for the long term. There’s no point in paying interest on 30 years of a home loan if you plan on moving in 3 to 5 years.

Interest-only mortgages

With an interest-only mortgage loan, the borrower only pays the interest on the loan for a specified period, typically at 5, 7, or 10-year increments, and then pays off the principal in a lump sum or by subsequent payments at a specific date. This loan is better for disciplined borrowers, borrowers with substantial assets, or homebuyers who don’t expect to keep the home long-term.

Pros of interest-only mortgages

• Large payments are deferred, making this a good mortgage loan for people who expect to have more money in the future.
• There is an increased cash flow while in the interest-only payment period.

Cons of interest-only mortgages

• You are not building equity during the interest-only payment period.
• You must be certain of a large sum being available when the payment comes due or risk defaulting on the loan.

This type of mortgage is ideal for someone who wants a home now and anticipates making large payments in the future. Some examples might be a doctor or lawyer who is just starting or an investor who is sure that their return on investment will be significantly higher if they invest their money elsewhere.

Other Types of Mortgage Loans

Fixed-rate and adjustable-rate mortgages account for about 75% of home loans. However, there are other mortgage loan options that aren’t as popular or as common as the more traditional loans.

Government-insured mortgages

Government-insured loans are loans issued by lenders but are backed by the U.S. government if defaulted. Some examples of government-insured mortgages include FHA loans (for lower-income families), VA loans (for eligible military members and veterans), and USDA loans (for qualified borrowers in rural or low population areas). Benefits for these loans include small down payments as well as flexible qualification criteria.

Jumbo mortgages

Jumbo mortgages (aka jumbo loans) are a type of financing designed to finance luxury properties or houses in highly competitive housing markets. These loans exceed the Federal Housing Finance Agency’s limits and have unique tax implications and underwriting requirements. Approval for a jumbo mortgage requires an exceptionally low debt-to-income ratio, truly excellent credit, and a more rigorous screening process than conventional loans. It is best for those looking to buy more houses than they could typically afford and whose credit and income bear scrutiny. As Fannie Mae or Freddie Mac does not back these loans, they are a risk for the lender.

Reverse mortgages

A reverse mortgage is a type of mortgage available only to older homeowners (62+) who own their own homes. This type of loan allows the homeowner to access the equity they’ve already built and then defer payment until they die, sell out, or move out of the home. They are still responsible for paying property taxes and homeowners insurance. Some regulatory authorities are skeptical of these loans, insisting that they are ripe for fraud and are difficult for the average homeowner to understand.

Which is the best mortgage loan type for you?

Before investing in a home, it is beneficial to do your research. We’ve touched on several different types of mortgage loans available, but each one has its own set of risks and benefits depending on the individual situation. Most homebuyers end up taking a traditional loan, but other choices may work better for some people. Sometimes it is necessary to go with the non-traditional mortgage loan due to an inability to secure a traditional loan. It could be because of less than stellar credit or a high debt-to-income.

If you dream of owning your home but are confused about the right mortgage loan for you, we at Hero Home Programs can help. Reach out today to see how this program can help you save thousands of dollars on your path to homeownership.

Original post here: Different Types of Mortgage Loans

How Big Of A House Do You Need?

Choosing a home isn’t as simple as square footage or number of bedrooms. When deciding which size house is best for you, keep these important factors in mind.

Will this be your forever home?

You may feel pressured to think of your next home as the end all be all. But that’s not necessarily true! It’s possible you may want to move after a few years. Think honestly about the likelihood of you staying versus moving. Will you stick with this home for the long term, or is this house good enough for the time being?

Will your income change in the future?

Your income may change depending on what phase of life you’re in right now. For someone just starting off in a career, their income may increase the more they grow in their profession. But someone looking to retire in the next few years will probably see a decrease in their income. You don’t want to set yourself up for financial stress in the future. It’s better to choose a house that’s well under your budget than to spread your finances too thin. 

A larger home means higher maintenance and upkeep costs. The bigger the space, the more expensive renovations and updates will cost. Keep your future income in mind when choosing the right home for you.

How will you use this space?

Now’s the time to think about your priorities and values. Are you really going to use a large dining room to host dinner parties? If so, great! But if not, it’s okay to be honest about your priorities. Just because your best friend loves to host dinner parties doesn’t mean you have to! Maybe you value outdoor space more and would rather have a nice backyard where you can garden. 

This is your home. You don’t need to feel pressured to throw parties or have family stay over for the holidays if you don’t want to. If sharing your home with the ones you love is something you truly value, then having that extra space is a good idea.

How much privacy do you need?

Every family dynamic is different. Some people really value their alone time, and need their own space away from their kids or spouse. On the flip side, a house that’s too big for your family may feel emptier and less cozy. Whether you need more space to yourself, or like to feel closer to the ones you love, think about the right size and layout that strikes a nice balance for your family.

Does this home feel spacious enough?

Square footage can be deceiving. A smaller home can feel spacious depending on features like layout, lighting, and decor. Reducing clutter and maximizing your space with mirrors, lighter colors, and open concept designs can transform the perceived size of a home. 

Another thing to consider, you may be perfectly happy with a smaller master bedroom if there’s plenty of storage space in your closets. Having adequate storage can help you reduce clutter in the rooms you use the most. 

The Takeaway

You need to take an honest look at your values to truly visualize your life in a new home. Getting hung up on things like square footage and number of bedrooms may keep you from finding the home that suits YOUR dream. For example, being open to a smaller home may give you a bigger budget to choose your prime location.

On the flip side, if you value your space and privacy, then a larger home is probably more ideal. As long as you’re honest with yourself about your lifestyle, values, and priorities, then you’ll be able to strike the perfect balance and find the home that’s right for you.

Original post here: How Big Of A House Do You Need?

Top 6 Most Common Home Buying Myths

Buying a home is one of the biggest financial decisions you can make. That’s why it’s important to not let these common myths get in the way of what’s best for you and your future.

Myth #1: You Want The Largest Square Footage Possible

When searching for your new home, don’t get too hung up on the square footage. Depending on the layout, a smaller home can actually feel a lot more spacious. When going to open houses, you should ask yourself, how big does this space feel? Also keep in mind the potential for storage. A smaller bedroom can work perfectly well for your needs if there’s plenty of storage space in the closets. 

Other factors such as open concept designs, lighter colors, and reduced clutter can greatly maximize the amount of space in your new home. 

Myth #2: Your New Home Is Forever

While there’s a certain expectation out there that you have to stay in your new home forever, there’s still a possibility that you may move in a few years. When searching for homes, be honest with yourself about the likelihood of staying versus moving. If there’s a strong possibility that you’ll move in 5 to 10 years, then you may consider choosing a house that works well for you right now, instead of a home that has to be perfect for you well into the future.

Myth #3: Certain Types Of Mortgages Are Better Than Others

Everyone’s financial situation is different. The myth that one type of home loan is better than the other is simply not true. When making these financial decisions, it’s crucial to speak to a mortgage professional. An experienced and trustworthy mortgage lender can help you figure out the best course of action for you.

Myth #4: You Always Want The Lowest Possible Rate

If you focus too much on interest rates, then you might overlook other factors such as extra fees. While rates do play a role in your finances, they don’t paint a full picture of the long term value that comes with home ownership. When choosing the best mortgage professional for you, always get a second opinion and remember that overall value is more important than just low rates.

Myth #5: Buying A Home Is A Bad Investment

Buying a home is a major financial decision that should not be taken lightly. That’s why there are plenty of resources and professionals out there to help you with this decision. And yes, housing prices will go through highs and lows, but studies show that homes generally increase in value over the long term. 

As you pay off your mortgage, you build equity in your home, which is essentially like a savings account for the future. But when you pay rent, that money just goes into your landlord’s pocket. Over time, owning a home is generally a better investment than simply paying rent.

Myth #6: You Can Save Money By Foregoing A Realtor

A good real estate agent can be a total game changer when it comes to buying a home. A realtor can negotiate with the seller on your behalf, potentially saving you a lot of money on closing costs or repairs. When hiring a real estate agent, it’s important to work with someone who is knowledgeable and trustworthy. Having a friendly and professional relationship with your realtor can make the process of buying your home a thousand times easier.

The Bottom Line

There’s a lot of information out there when it comes to buying a home. While it’s important to do your research and listen to suggestions, everyone’s situation is unique. Make sure to honestly think about what makes the most sense for you and your future.

Original post here: Top 6 Most Common Home Buying Myths

The Truth About Changing Rates

In the housing industry, there’s always a lot of talk about changing interest rates. But if you focus too much on the rates, you might miss out on the long term value of home ownership.

Rates change, housing prices go through highs and lows, and the markets will fluctuate. But the value of home ownership is more consistent. Even as rates go up and down through the years, owning a home will generally appreciate in value over the long term.

What a lot of people don’t understand is the difference between paying rent versus paying a mortgage. When you pay your rent, that money goes straight into your landlord’s pocket. All your rent money does is give you a place to stay for the next month. But as you pay off your mortgage, you build equity in your home.

Building home equity is like a savings account for the future. For the long term, as you pay off your mortgage, you will likely build home equity, which gives you the option to tap into your equity in the future.

There are many different ways that you can use your home equity. A lot of people tap into their equity to pay off credit card debt. But you can also use this money for travel, home renovations, even life events such as helping to pay for your kid’s wedding.

Besides the long term financial value of homeownership, there’s also the emotional value to consider. As you reach a certain point in your life, you start to realize how exhausting it can be moving from one rental to another.

Transitioning into a stable living situation allows you to put down roots for the future. Owning a home means having a space to make long lasting memories that you and your family will share for years to come.

The Bottom Line

Rates change all the time. In the grand scheme of things, however, rates don’t really matter as much. What it really comes down to long term value, and what that value means for your future. 

When choosing the best mortgage options for you, think about the overall value. If you focus too much on rates, you might overlook other factors (such as extra fees). Also, make sure to get a second opinion when it comes to your mortgage options.

You should always talk to a professional about how to make the best financial decisions for your unique situation. And while changing rates do play a role in these decisions, they don’t paint a full picture of what it really means to own a home.

Original post here: The Truth About Changing Rates

What Is Home Equity And Why Is It Important?

You may be unsure on what it means to build equity in your home. For a better understanding on what home equity is and how to use it to your advantage, check out the article below!

What is Home Equity?

Home equity is the difference between what you owe on your mortgage and what your home is currently worth.

To calculate your home equity, take the current value of your home and subtract what you owe on your mortgage. For example, if the current value of your home is $250,000, and you owe $100,000 on your mortgage, then you have an equity of $150,000.

The more you pay off your mortgage, the higher your home equity (as long as your home value doesn’t decrease).

If your home value decreases faster than the rate at which you pay off your mortgage, then your equity will decrease as well. 

There are two main ways to build home equity: by paying off your mortgage, or if your house increases in value.

To determine the current value of your home, you will need to talk to a real estate appraiser. But you can also try doing your own research to get an estimate. If you search for real estate prices in your neighborhood, and look at properties that are similar to your home, those property prices can give you a general idea of what your home is currently worth.

Here are some ways you can build equity in your home:

•  Make a large down payment
• Focus on paying off the mortgage
• Stay in your home longer than 5 years
• Renovate and add curb appeal (landscaping, kitchen & bathroom updates)

How To Use Your Home Equity: Cash Out Refinance

In a cash-out refinance, you refinance your current home loan for more than what you owe on your mortgage. You can receive the difference (the new loan amount minus what you owe) in cash. In order to qualify for a cash-out refinance, you need to build equity in your home.

Let’s say you take out a loan for a house that costs $200,000. One year later, you’ve paid off $50,000 of that mortgage, and good news! Your house has increased in value to $250,000!

This means you now owe $150,000 on your original mortgage, and you have $100,000 in home equity. 

If you choose to refinance your current loan for $200,000, then you can receive a $50,000 check at closing. The $50,000 sum is the difference between your new loan amount and what you owe on your original mortgage.

However, you will need to repay that $200,000 in monthly payments with interest, along with the closing costs of refinancing.

The amount of extra money you can get from this cash-out depends on how much equity you have. The more equity you have in your home, the more money you can take from a cash-out refinance. 

Traditionally, a lot of homeowners use the cash-out refinance to pay off credit cards or renovate their home. You can also use this extra cash for travel, investing in your business, or even major life events such as paying for your kid’s college tuition.

Summary

Building equity in your home gives you more refinancing options for the future. It’s hard to predict what may come up later down the road, so having the freedom to tap into your home equity can help you prepare for major life events.

It’s helpful to understand your different options when it comes to refinancing. But if you’re interested in refinancing your home, you should speak to a mortgage professional who can look at your unique situation and help you make the best decisions for you.

Original post here: What Is Home Equity And Why Is It Important?

Tips For Buying A Newly Constructed Home

There are several benefits to buying a newly constructed home. For example, new builds allow you more opportunities to customize your home. Plus, most newly constructed homes have less maintenance costs over the first few years. 

To ensure the best possible experience when watching your new home come to life, keep these important tips in mind!

Research The Builder

Choosing a reputable builder is crucial to a well-constructed home. Make sure to research the builder’s reviews. And you can even drive by their previous projects to get an idea of their quality of work. Looking at the builder’s past projects can give you more insight into their experience and reputation. 

Other questions to ask when researching your builder:

• How often will a superintendent visit the construction site?
• Which features are included in the build, and which features are upgrades?
• How often can I visit the construction site?
• How many properties have you sold so far?

There are certain red flags to look for when researching your builder. Obviously, several bad reviews from past clients can raise major concerns. Also, if a builder, superintendent, or project manager seems hesitant to answer your questions, this could reflect poorly on their experience. Another thing to keep in mind, if you visit their other construction sites, and they seem disorganized, this could impact the quality of their work.

Maintain A Clear Line Of Communication

It’s also important to stay in contact with your builder. The better you communicate, the less likely you’ll have to deal with misunderstandings down the road. A great way to establish a line of communication is to start with a pre-construction meeting. In this meeting, you will go over the construction details with your project manager. And you can also set certain expectations such as, how often will the builder give you progress updates? Is it ok for you to call or text the builder and if so, how often? 

Visit The Construction Site

Stopping by the construction site is a great way to prevent any miscommunication in the building process. Not to mention, watching your dream home come to life from the ground up is a fun and rewarding experience! 

When you visit the site often, you’ll be more likely to notice small details that the builder may have overlooked. Also, make sure to take pictures! Having plenty of pictures can help you later when you need to know the exact location of a certain pipe or electrical connections. It’s best to take pictures of these features before they’re covered up with drywall.

Understand Your Construction Timeline

Generally, a new construction can take about 7 to 12 months to complete. However, many factors can cause delays such as weather conditions, or waiting on materials to be delivered. Many unexpected changes can push back the construction timeline. For this reason, most builders add a one to two week buffer into their timelines. If you’re in the process of selling your current home, or ending a leasing agreement, keep these possible delays in mind, so you’re not in between homes for a few weeks. 

Have Your New Home Inspected

Even newly constructed homes may have structural issues. Hiring a professional and licensed inspector can put your mind at ease when it comes to the quality of the build. Depending on your preference, there should be 1-3 inspections of your new home: the foundation inspection, the pre-drywall inspection, and the final inspection.

If there are any problems in the quality of construction, the inspector will take note of these issues in the report, while also suggesting a solution. Once you have this information, you’ll be able to address your concerns with the builder and negotiate a solution.

Original post here: Tips For Buying A Newly Constructed Home

What Happens If My Credit Changes Before Closing?

Mortgage lenders check your credit at the beginning of the approval process, and they also pull your credit again right before closing. If the second credit check comes back the same as the first, the closing should stay on schedule.

However, if the second credit check comes back lower than the first, or raises some concerns to the lender, this could delay closing. The mortgage lender may need to send your application back to an underwriter for a second review.

If there are major concerns raised by a change in your credit score, this can cause you to lose the loan. It’s crucial not to mess with your credit during the application process.

There are many changes that can harm your credit before closing. 

Here are some things to avoid:

• Being late on a payment and sent to collections
• Acquiring a new loan or line of credit
• Closing an existing loan or line of credit
• Making a large purchase, especially on your credit card
• Opening a new credit card account, or closing an existing credit card account
• Taking out a personal loan

If at the first credit check, your score was already on the lower end, then it’s especially important not to mess with your credit before closing.

Mortgage lenders look at your credit to determine any risks or uncertainties that may prevent you from paying your bills. Sudden changes can mean major red flags that harm your eligibility for a home loan.

All in all, you need to do everything in your power to keep your household finances stable throughout the closing process. Any changes in income, debt or spending habits can negatively affect the closing process and become a roadblock between you and your dream home.

Original post here: What Happens If My Credit Changes Before Closing?

The Emotional Highs and Lows of Buying Your Dream Home

Buying a house is one of the biggest financial decisions you can make. Here’s how you can set the right expectations about the road ahead, along with some tips to help you along the way.

Buying a Home: The Emotional Lows

Let’s get the bad news out of the way: nothing worth having ever comes easy. Here are some of the emotional lows you may experience when buying your home.

Online photos may not tell you the full story

We’ve all been deceived in the past. Maybe you bought a cool T-shirt online, but when it arrived at your door, the material was flimsy and the colors faded. Similar to looking at houses online, most of the listing photos will probably be more flattering than in real life. While searching online is a great starting point, don’t get your hopes up until you visit the house in person.

Open houses can get exhausting

Visiting open houses can be really fun at first, but after the 5th or 10th open house, you’ll probably get exhausted. Plus, you’re probably incredibly busy! With work, day-to-day chores and errands, penciling in all these open houses can be a major strain on your schedule. Unfortunately, you have to be patient and keep searching until you find the right one.

You have to be on the lookout for red flags

When searching for homes, you need to ask about any issues such as water damage, electrical problems, or old HVAC systems. You have to do your homework to avoid dealing with some major repairs down the line. Keep in mind that minor cosmetic details like paint or landscaping can be easily fixed, but replacing something as costly as a damaged roof is far from easy.

You’ll have to make compromises

When narrowing down your home search, you’ll have to strike a balance between your needs and your wants. You may really want to live close to downtown, but you need to stay within your budget. We’d all like to have our cake and eat it too, so separating our needs from our wants isn’t very fun. 

The closing process can be nerve-wracking

From the mortgage application, to getting approved, submitting an offer, and then waiting to hear back, it can all be both tedious and terrifying! 

To minimize this stress, do your best to choose the right mortgage professional for you. Always get a second opinion from a different mortgage lender and work with the mortgage pro who can get you the best value (not just the best rate). Not only should your mortgage lender genuinely care about helping you, but they should also be an open book when it comes to your different options.

The same goes for your real estate agent. A great realtor can change the game when it comes to searching for your home and negotiating with the seller. Having a professional, friendly, and trusting relationship with your realtor will make the whole process run a lot more smoothly.

Buying A Home: The Emotional Highs

Throughout all the uncertainty and frustration, it’s crucial to remember why you’re working toward owning your dream home. Keep these major perks in mind to help you through the hard times.

Not blowing your money on rent

The rent is too dang high. It’s annoying putting a third of your monthly income into paying for an apartment, especially when your upstairs neighbors are clomping around like Irish river dancers all night. The thing about owning a home, your housing costs are going into a solid real estate investment, not just your landlord’s pocket.

Having more space to suit your lifestyle

As rental prices increase, the size of apartments seem to shrink. In a lot of apartments, there’s hardly any space for storage, cooking, exercising or your favorite hobbies. When you find your dream home, you get to pick a place that suits your lifestyle. You may really want to get into gardening or woodworking, but it’s hard to treat yourself to these fun activities when you’re stuck in a cramped space.

The freedom to personalize however you want

When you own your home, you get to define that space however you want! Whether it’s painting an accent wall, updating the appliances, or sprucing up the landscaping, you get to make this space your own. Having the freedom to put your own signature on your surroundings can fill you with a sense of pride, as if to say, “I made this!”

Not having to answer to a landlord

When you’re renting, you have to follow someone else’s rules. You may really want a puppy, but your landlord says “nah.” Constantly trying not to upset your landlord can add a lot of extra stress to your daily life. After you buy a house, you’ll never have to worry about those ominous emails from Brenda down at the leasing office ever again!

Having your friends and family over for dinner

With a lot of rental situations, it’s hard to have guests over. In most apartments, there’s no space for a dining room, so dinner parties are out of the picture. Not to mention, most rental situations come with zero extra parking for your guests. Plus, you can’t throw a noisy party or you might tick off the neighbors. 

When you own a home, you have more freedom to share your space with the ones you love. You can have family over for the holidays, invite friends to come watch the game, or even host parties every now and then! All while not having to worry about your neighbors ratting you out to the leasing office.

Putting down roots for your family’s future

As you reach a certain point in your life, you start to realize how exhausting it can be moving from one place to another. Moving from a temporary into a stable living situation allows you to put down roots for the future. Owning a home means having a space to make long lasting memories that you and your family can share for years to come.

Whether it’s planting rose bushes in the backyard that bloom every spring, hanging framed family portraits in the hallway, or tracking how tall your kids are with pencil marks on the wall, putting down roots gives you a sense of belonging. Throughout all the highs and lows, you’ve finally made it. Your home sweet home.

Original post here: The Emotional Highs and Lows of Buying Your Dream Home

Refinancing Your Home Mortgage: The Basics

You may be wondering what it means to refinance, the benefits of refinancing, and what different refinancing options are out there. Check out this quick article to learn more!

Refinancing: Introduction 

Refinancing your home mortgage means converting your current home loan into a new one.

There are several reasons why someone may choose to refinance. Benefits can include reducing your monthly mortgage payments, getting a lower interest rate, shortening the term of your loan, or tapping into your home’s equity.

Different Refinancing Options

To better understand refinancing, it’s helpful to look at different examples of refinancing options. For instance:

• Current FHA mortgage holders may choose to refinance into a different type of mortgage so they can get rid of mortgage insurance fees.
• If you have a 7-year adjustable rate mortgage (ARM), you may refinance your ARM loan into a fixed loan, so that your interest rate doesn’t go up at the adjustment period.
• You may currently have a 30-year fixed rate loan, then choose to refinance into a 15-year fixed rate mortgage so you can shorten the term of your loan.
• If you’re currently on a 15-year mortgage, you can refinance to a 30-year mortgage. This lengthens the term of your loan but reduces the monthly payments. 
• Tapping into your home’s equity: You may choose to refinance for more than what you owe on your current loan. In this case, you’ll receive a check for your home’s equity. This is called a cash-out refinance. Oftentimes, people can get the cash-out in addition to lower interest rates on their loan.

How To Get Approved For A Refinance

You still need to qualify for the refinance the same way you had to get approved for the original loan. This means submitting an application with a mortgage lender, going through the underwriting process, and closing on the refinance similar to how you closed on the home loan.

In certain cases, you may be able to opt for a “Streamline” refinance. This “streamlined” option has a faster approval process and doesn’t require you to provide as many documents. 

When choosing a mortgage lender to help you refinance, it’s best to get a second opinion. Rates and fees can vary from lender to lender. 

Also, consider reaching out to the mortgage lender who helped with your original loan. Working with a mortgage professional who already has a good understanding of your situation can make the process run more smoothly. 

While there are many benefits to refinancing, you should speak to a mortgage professional to help you choose the best course of action.

Original post here: Refinancing Your Home Mortgage: The Basics

An Essential Guide For Home Buyers

Finding your dream home can feel like looking for a needle in a haystack. Keep in mind these essential tips when searching for the perfect fit. 

Set Your Budget Before Starting Your Home Search

Setting a price range is crucial because your budget can help narrow down your search. A great way to figure out your budget is to get pre-qualified by a mortgage lender. Pre-qualification is a quick and easy way to have a mortgage professional assess your financial situation and give you a rough estimate of what you can afford. 

Pre-qualification is a great first step, but you will also need to get pre-approved for a home mortgage. Pre-approval is more in-depth. You will need to provide documents and records having to do with your debt, income, and credit history. A mortgage professional and underwriter will use these documents to verify your eligibility for a home loan. 

Once you get pre-approved, the lender will give you a pre-approved loan amount, which tells you how much you can afford. In short, pre-qualification is an easy way to get an estimated budget, while pre-approval gives you a more exact maximum loan amount. Remember, your pre-approved loan amount is the ceiling, so you should focus your search on homes that cost less than your maximum loan amount.

Consider The Location

Location! Location! Lo-... you know the rest. Cliche as it sounds, this age-old saying is around for a reason! You should think long and hard about the location of your new home. 

Some questions to consider:

• Do you want to live in a place where you can easily walk to nearby shops and restaurants? 
• Do you want to belong to a more close-knit community?
• Or, are you looking for a more private space located off the beaten path?
• How safe is the neighborhood? What are the local crime statistics?
• How easily can you commute to work or school?
• Is this in your preferred school district?
• Do you want to live close to family and friends?

A great way to figure out what location you’re looking for is to think about where you currently live. What do you wish was different about the location you’re in now?

Think About What Features Are Important To You

When deciding on the features that matter most to you, make sure to plan for the future. For example, if you want to expand your family, you’ll eventually need more space. 

Also consider what lifestyle amenities are crucial to you. Maybe you love to garden, so you’ll want a big enough yard that allows room for your favorite hobby. 

Similar to how you should think about your current location, you should also ask yourself about your current living situation. What do you wish was different? What features are you missing out on now that you’d like to have in your new home? For instance, do you love to bake and want a larger kitchen? 

Some house features to think about:

• Size and square footage
• Air conditioning
• Number of bathrooms/bedrooms
• Outdoor space
• Floor plan and layout that meets your needs
• Natural light
• Storage space

Assess The Property Conditions

As you narrow down your search and start going to open houses, you’ll need to look out for red flags. Most importantly, checking for any problems that will be difficult or expensive to fix:

• Water damage or mold
• Old insulation
• Electrical wiring issues
• Damaged roof
• Older HVAC, heating, A/C systems
• Issues in plumbing
• Uneven floors
• Cracks in the exterior 

As you start going to open houses, come prepared with a list of questions. For example, why do the sellers want to move? When was this house built? Are there any issues or problems with the home? How long has the house been on the market?

Think About Features You Can Personalize

Don’t get too hung up on minor cosmetic details like paint color, landscaping or lighting fixtures. While a beautiful coat of fresh paint can be enticing to home buyers, it’s easier to paint the walls than to replace a damaged roof. 

For more complicated renovations, like updates to the kitchen or bathroom, carefully consider your budget. It can make sense to choose a home that’s more of a fixer upper if it’s in your perfect location and has the other major features you need.

If you plan on renovating your home, keep track of your closing costs and move-in expenses. You may feel eager to start renovations as soon as you move in, but some updates may have to wait until after you’ve paid the more urgent expenses. 

Separate Your Needs From Your Wants

You may really want to live near downtown, but you need to stay within your budget. While it’d be nice to have your cake and eat it too, you’ll probably have to make some compromises as you search for your dream home. 

Separating your needs from your wants can feel a bit like a balancing act at first. However, eventually things will fall into place as you reach your dream of homeownership.

Original post here: An Essential Guide For Home Buyers

Are You Spending Too Much On Rent?

The rule of thumb is that you should not spend more than 30% of your household income on rent. This means that if your combined household income is $10,000 per month, then your rent should be no more than $10,000 x 0.3, which comes out to be $3,000. 

This 30% rule of thumb exists so that a household can cover their current expenses while also saving money. If your household is spending more than 30% of your income on rent, this can make it difficult to manage your current expenses while also securing savings for the future. 

While the 30% rule is helpful to keep in mind, it can be difficult to stick to this rule for people who are cost-burdened by debt. For this reason, people with high student loans or costly debt payments should consider using the 43% rule. 

The 43% rule states that your monthly housing cost plus your monthly debt payments should be no higher than 43% of your monthly income. Meaning, if your household monthly income is $10,000, then your total rent and monthly debt payments should not exceed $10,000 x .43, which is about $4,300.

Depending on your financial situation, it may be difficult for you to stick to either the 30% or 43% rule. If you’re a current renter hoping to own a home one day, saving for a down payment may prove difficult if you’re cost burdened by debt or high rent expenses. If this is the case, consider cutting down on expenses so you can save for a down payment on a home. 

There are many ways that cost-burdened renters can save money and reduce monthly debt payments. For example, refinancing student loans for a longer term or lower interest rate can lower your debt payments. You can also consider getting a roommate to help cover rent.

Most importantly, you should take a critical look at your expenses. This will help you create a budget and cut down on spending. Some of the most common expenses that hold renters back from saving money are eating out, online shopping, excessive utility usage, and subscription services.

By reducing your spending wherever possible, you can more easily save for a down payment on a house, rather than blowing all your money on high rental prices. By buckling down on your monthly expenses, you can create a better financial situation for yourself in the long run.

Original post here: Are You Spending Too Much On Rent?