Tag: tips

Could You Benefit From Some Lesser Known Financing Options?

When people think of financing a home, what immediately comes to mind is getting a mortgage loan. For some people, this isn’t an option, or would be difficult to achieve. Fortunately, there are options that don’t involve loans or might make a loan easier to get, some of which you may not be aware of.

One option is a rent-to-own agreement, which can come in two basic forms. It can be a lease option agreement or a lease-purchase agreement. Both allow a prospective buyer to lease a home for a period of time before purchasing it, with a portion of the rent going towards the purchase price, in exchange for a small upfront fee. But there are differences. With a lease option agreement, the tenant has an exclusive right to purchase the home at the end of the lease term, but may also decide not to, forfeiting that right. A lease-purchase agreement creates a legal obligation for the tenant to purchase the home at the end of the lease term. This may sound like it’s strictly a negative, however, a lease-purchase agreement also locks the home price at the time the parties enter the agreement. Given that home prices tend to appreciate over time barring unexpected economic situations, this could mean your purchase price will be lower than market value. In most cases, you will still need a loan at the end of the lease term, but you will be accruing equity in the meantime and likely improving your credit score.

Another option that might allow you to bypass the need for a loan entirely is a shared equity arrangement. A shared equity arrangement is relatively simple, but might require connections. It involves seeking out others, typically investors, to share both financial responsibility as well as equity for a home. This is an excellent option for those who cannot get a loan, but can be a significant disadvantage when it comes to sell the property, since you won’t be getting nearly as much equity from your home’s value appreciating over time.

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Why You Might Want To Consider Living In A Gated Community

It’s not uncommon to think of gated community homes as mere status statements. They’re more expensive and more exclusive, both of which sound like they’re tailored toward rich people who want to flaunt their wealth. But there are actually valid reasons that gated communities tend to be more expensive. You don’t have to want to flaunt it to want to live there.

Obviously, you do need to have the money. But if you do, their high price also makes them sound investments in the future. Moreover, the extra money you spend isn’t wasted if you don’t end up selling. Gated communities automatically come with enhanced security measures, amenities, and routine maintenance. Security and amenities are high-value features that you’d need to pay extra for anyway to get elsewhere, while routine maintenance can both save money on repairs and ensure that property values don’t decline due to deferred maintenance. Another thing gated communities offer that doesn’t necessarily have a price tag, but tends to be something people value, is a sense of community while simultaneously retaining privacy.

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Mistakes To Avoid When Pricing Your Home

If you’re planning to sell your home, the ideal result is to get as much from the sale as you can. This leads sellers to look for any and all features or qualities that could potentially raise the price. But the fact of the matter is that the market sets home values, not individual sellers. There are a few common mistakes sellers make that lead them to list their homes at overpriced values, which doesn’t benefit them in terms of actually getting the sale to happen.

Sometimes sellers even purposefully list their home above market value. Usually, they are thinking they can start high and drop the price if no one is buying. However, all this does is reduce overall interest and cause the sale to take longer. If the price is right to start with, multiple people will be interested and might be forced to offer over asking to compete with other prospective buyers. The other reason sellers sometimes purposefully list above market value is that they need to reach a certain price to gain profit from the sale. There’s no point to this — either the home won’t get sold at all, or the seller will be forced to drop the price anyway and take a loss.

Of course, the seller is not always intentionally overvaluing their home. You might think that the value of a home includes both its intrinsic and extrinsic value. While this is technically true, extrinsic value is highly subjective. Don’t attempt to raise the price simply because you love the paint color you chose or you have good memories living there. If those feel like a significant portion of the home’s value to you, you probably don’t actually want to move. Of course, external factors may mean you have to sell — in that case, just remember to hold your emotions at bay. But what if you actually did make tangible improvements to the home? Well, that’s great, but not all improvements have a great return on investment. Keep in mind that it’s entirely possible you aren’t making a profit from every single upgrade you made.

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How To Start An Herb Garden

Starting an herb garden is a great way to enhance your home’s curb appeal or provide a good first impression. Even if you aren’t planning to sell, herbs are useful for cooking or simply to bring a fresh, green scent to the home. The best part is you can start small, by creating a miniature herb garden on your windowsill.

The first step to making a windowsill herb garden is to choose a window. The ideal window will probably be one that faces south or southwest. Make sure that whichever window you choose gets at least six hours of sunshine per day and is away from drafts. Once you’ve picked a spot, choose your plants. These can be either existing herb plants or seeds, but take note that starting from seeds will take several months and require more attention, while plants are more expensive. Your container should be 6-12 inches deep.

Now to keep your plants healthy as they grow. For seeds, keep the soil moist, rotate the container and ensure seedlings get plenty of vitamin D from sunlight. For plants, water sparingly, as they don’t like to sit in wet soil. A good rule of thumb is to stick your finger in the soil and, if it’s dry an inch below the surface, it’s time to water. To encourage branching, snip off the tips of your plants once your herbs are usable.

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Low Cost, High Value Home Repairs

While repairing and remodeling your home before selling can certainly increase the value of your home, you don’t need to fix or update everything. Some repairs can be done quickly and cheaply, while still having a significant effect. Focusing on those repairs is a good way to get the most value out of your time and money. This is especially true if the only repairs needed are low cost, high value repairs.

Prospective home buyers care a lot about first impressions. If something is visibly broken or damaged, they’re going to assume there are more, possibly less obvious broken or damaged aspects of the home. Even if the only thing wrong with your house is a torn screen door, that’s something that will be readily apparent to a prospective buyer. Other first impression repairs include leaky faucets and toilets, cracked paint, and squeaky doors and cabinets. These are also all potentially things you can fix yourself if you have the right materials and tools. Some more high value “fixes” involve things that aren’t broken at all, but may not leave a good impression otherwise — such as cluttered floors, or weeds or bare soil in your yard.

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The Impact Of School Systems On Home Values

For obvious reasons, prospective homebuyers who are expecting to have children, or already have them, might want to move to an area with a highly rated school system. What might not be so obvious is that there are benefits to this even if you aren’t directly impacted by what schools are nearby. Schools affect more than just students; they are a major driving factor in home values.

Neighborhoods with good schools are more desirable, and therefore have higher home values. And because schools don’t typically vanish unless they’re heavily underfunded — which the good schools tend not to be — this is a relatively stable factor in prices. That means homes in these neighborhoods are solid investments, even if you can’t take advantage of the good education.

Conversely, if the school system is not very good, you may think you’re getting a bargain deal with low prices. Unfortunately, your home value probably also isn’t going to go up very much. However, if you are following the trends, you may be able to take advantage of rapidly improving school systems. Maybe prices aren’t high yet, but will be as the schools continue to grow.

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Is A Cul-De-Sac A Good Location?

Living at the end of a cul-de-sac is frequently met with positive connotations. And indeed, cul-de-sac homes tend to have higher property values. But what is it that makes them more expensive and more desirable? Well, certainly not everyone wants a home on a cul-de-sac. As with any kind of location, there are both distinct advantages and drawbacks.

One of the biggest reasons that cul-de-sac homes tend to have higher property values is actually just that they’re usually on large lots. Much of the value in any property is in the land itself. This in itself can be a benefit, though. Larger lots typically means you’ll have more privacy. Cul-de-sacs also see less traffic, making them safe for children to play outside and for residents to enjoy outdoor activities, as well as quieter. Cul-de-sacs can also be the best of both worlds, in a sense. Despite the larger distance between homes due to larger lots, many people consider cul-de-sacs to foster a sense of community. This is attributed to the circular layout of the street as well as more opportunities for outdoor activities.

Not everyone considers a tight-knit community a good thing, though. If you live on a cul-de-sac, there’s a good chance everyone knows everyone else. Or if you don’t, the rest of them know you as the person who doesn’t interact with them. There’s not a great deal of anonymity. Even if the seclusion is what you’re aiming for, this can also be a negative. Residents may need to navigate through winding streets to reach main roads, potentially leading to longer commute times and increased travel distances. The roads may also be less accessible.

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The Initiatives That Are Improving Access To Affordable Housing

Increasing house prices and relatively stagnant wages have led to the need to rethink our strategies regarding housing. Of course, solving the root issue would be preferable — but if that’s not an option, easing the burden is a useful venture. There have been several recent innovations in methods to approach affordable housing.

A couple of them have been around for a while, but not necessarily targeted at affordable housing. These are government subsidies and grants and developer incentives. If you give people money or tax breaks to build or buy affordable housing, it’s going to become easier. Another that you may have heard of is micro-housing. You may dream of a large home, but the truth of the matter is that smaller houses are not only cheaper, but also more cost effective to build. The only reason they weren’t being built before is lack of demand.

There are also some options you may not be aware of, though. These are community land trusts (CLTs) and shared equity models. CLTs attempt to reduce the cost of homeownership by separating land cost from building cost — normally, a house and the land it’s built on are purchased simultaneously, but with CLTs, the land is owned by a trust and only the structure is sold, so it costs less to buy. A shared equity model allows a buyer to purchase only a portion of the ownership of a home, with the share owned increasing as the buyer accrues equity and uses it to purchase a greater share. This is somewhat similar to a loan, but carries less risk, with the downside being that the buyer doesn’t have exclusive legal ownership of the property.

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Some Things To Know Before Purchasing A Property

Before purchasing a new home, there are some important details that will help you make your decision. You’ll want to know what you’re paying for, as well as how to get the best deal. Asking the right questions will make the process much smoother for you.

First, make sure you know exactly what it is you’re buying. Is any personal property included in the sale? Is any fixture excluded? A purchase offer should address personal property and any exclusions. Also, if there are any disclosed concerns with the property, you’ll want to know what they are. It may not be worth your while if there are any major concerns. You’ll also want to know what you can expect to be paying in utility costs. After all, utilities are a component of homeownership costs.

If you want the best deal you can get, you should definitely ask your agent for a comparative sales report. This is a report which details recent sales histories of similar properties. Depending on the area, it may be unlikely to find an exact match, but this will give you a rough estimate of the expected price range for a property that you’re considering. This is particularly important if you’re concerned that the property may be overpriced or have some sort of defect. To aid in this, you can also ask how long the property has been on the market. If it has been sitting around longer than average, there could be an issue. Another question you may want to ask is if the sellers have already bought another home. This could give you some insight into the motivations of the sellers, which may help you negotiate.

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Watch Out For Loan Servicing Scams

You may have received a loan payment notice from a company you don’t recognize or you know you haven’t taken a loan from. That doesn’t necessarily mean it’s a scam, but it could be. Loan servicing is a real thing, whereby lenders outsource their payment collection to a loan servicing company. In addition, lenders can and do sell their loans to other companies, or companies could merge or get bought out. These are all legitimate reasons you could get a notice from an unfamiliar company.

Unfortunately, scammers are aware of all these methods, and attempt to convince you that what’s happening is legitimate. So, if you notice any deviation, you should always check to make sure it’s real. If the lender’s policy changes or the company is sold, you should receive a letter notifying you of this before any new collections occur. Beware that this process could be disrupted by improper transfer of records or collection dates coinciding closely with the change. Make sure to communicate directly with your lender, not the company that is collecting, until you are sure that it’s legitimate.

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How To Organize Your Outdoor Living Space

Whether your home has a lot of outdoor space or just a little, it’s possible to make good use of it. But in order to optimize your space, first you need to know how you want to use it. Not everyone wants to use their outdoor space for the same functions, and you want to have some idea of what function or functions it should serve for you.

If the space is large enough, divide it into zones. For example, you might have one area for relaxing with a book, one for a garden, and one for socializing with guests. Various types of lighting can help to transform each zone individually or your entire space. Perhaps you want soft ambient lighting, or maybe you want more functional lighting for reading or dining. Regardless of what you use your space for, a couple things are to be expected in any outdoor space, and those are seating areas and greenery. Choose weather-resistant materials such as wicker, teak, or metal and add cushions for improved comfort. Opt for plants that require minimal upkeep and grow well in your area.

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Understanding Prepayment Penalties

There’s a strong tendency to want to pay off your mortgage as quickly as possible. There’s also a strong reason for lenders to not want you to do that — they get less money because you aren’t paying as much in interest. Because of this, they frequently use prepayment penalties. This is an extra fee for paying off your mortgage too quickly or before the term of the loan ends. If you’re simply paying the minimum amount anyway, this won’t affect you, but if you think you may want to pay off your loan early, you’ll want to know your options.

Different states have different laws regarding prepayment penalties, and some don’t allow them at all. In states where they are allowed, they come in two types: hard prepayment penalties, which are fixed fees regardless of the reason for prepayment and that are usually a percentage of the loan amount, and soft prepayment penalties, which are only charged if the borrower pays a large amount in a short time period. Even in states that allow prepayment penalties, not all loans will have them, and you may be able to negotiate with your lender for their removal. When shopping for loans, make sure to read all the terms of the agreement, and talk to a legal professional if there’s anything you don’t understand or want to learn how to negotiate.

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How Generational Preferences Affect The Real Estate Market

If you’re planning to sell your home, or just want to be informed about current trends, you may want to know about present day homebuyers’ preferences. The problem is that looking at general trends only tells you about the largest cohorts of homebuyers, which are Millennials and Baby Boomers. Not only do these two groups have vastly different preferences between each other, it also ignores Gen X and the admittedly small group of Gen Z homebuyers.

Knowing the demographic makeup of your region can help you to understand what the people in your area are looking for. Alternatively, knowing what other cohorts desire can help tailor your choices to attract people to your home. There are certain things you cannot change, such as the walkability or access to public transportation in your neighborhood and presence of nearby parks or schools. However, if you know which types of people are looking for the sort of things that exist where you are, you can base your decisions about things you can change based on that group’s preferences.

Currently, Baby Boomers are not in the business of buying large, fancy homes. They’re looking to downsize, or remodel a home to suit their personal needs. They also generally want a healthcare facility nearby, since their age can lead to medical complications. Gen X is looking for a mix of business, family care, and leisure. Many Gen X people are working and also spend time caring for their aging parents, which leads them to want either nearby parks or recreational facilities to improve their work-life balance, or a suburban or rural lifestyle if they work from home. Millennials are the largest cohort of potential homebuyers, but they also can’t currently afford expensive homes. Rising housing costs mean Millennials are currently transitioning from renting to their starter homes, since many of them have had their initial homeownership plans delayed. As for what they’re looking for, they’re big on technology and sustainability, and prefer easy access to employment hubs via either walkability or public transportation. The group of Gen Z homebuyers that are actually able to afford a home have probably not been much affected by delays, so their digital native and eco-friendly identity is even more pronounced than in Millennials. They prioritize energy efficient homes, smart technology, and cultural diversity.

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Debunking Solar Energy Myths

Solar energy has been growing in popularity in recent years, and there are good reasons for that. Solar energy is highly sustainable, and isn’t subject to fluctuations in the market since the amount of available solar energy is not market-dependent. Some people aren’t convinced though, and that may be the result of some misconceptions.

A big reason people don’t even entertain the idea of solar energy is that they think it’s too expensive. While initial installation can be pricy, the savings over time allows the investment to pay off relatively quickly. This is especially true because utility prices are increasing, and solar panels don’t require utility payments, so your electricity bills may be cut out entirely. There are also government incentives in place that will allow you to offset the initial investment cost. Solar panels do have some maintenance costs, but they’re pretty minimal — just some regular cleaning is generally sufficient.

Others believe solar panels are only effective in warm, sunny weather. A more appropriate statement would be that direct sunlight enhances their efficiency. They still work perfectly fine in cloudy or rainy weather. Also, they actually work better in colder temperatures, not worse. This is because their efficiency is determined by a difference in energy between the photon particles in sunlight and electron particles in the panel — which have lower energy at colder temperatures — not the total amount of energy received. This means a hot, sunny day may result in the same efficiency as a cold, overcast day.

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Tips For A Stress-Free Housewarming Party

With all the stresses of of buying a new home and moving in, hosting a party may be the last thing on your mind, even if you really want to celebrate your move. You may instead want to simply book a reservation at a restaurant, especially if you don’t feel like cooking. But parties should be a way to de-stress, not a stressful experience, and the same goes for housewarming parties. Besides, you’ll want to send the invitations far enough in advance that you’ll probably have had some time to accommodate to your new home by the time the date comes around.

Remember not to make things harder on yourself or your guests. Instead of planning a full sit-down meal, provide snacks and beverages that people can pick and choose from at their own leisure. Decor can be relatively simple. You don’t need to have already finished unpacking your Christmas decorations — even if you did buy in December.

Even though there’s no need to be overly nervous, you should still put some thought into it. Pay attention to how you set up the space for your celebration. The areas where you want people to mingle or pick up snacks and drinks should be easily accessible. You can also make less work for yourself later by checking out local grocery stores when deciding what you want to serve. That way you get to know the area better, and your new neighbors might also appreciate something familiar to them.

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Real Estate Investment On A Budget

Many people believe they don’t have the capital to initiate a real estate investment. While it does require some capital, the requirement may be lower than you think. This is especially true if you can find a group of people that want to pool money with you for an investment. You don’t need to demonstrate that you could afford it on your own in order to convince investors to pool money. But even if you aren’t crowdfunding the investment, with enough good research you can find something that works on your budget.

The first thing you need to do is figure out what that budget actually is. While there is always some risk in investing money, real estate is not supposed to be a high-risk investment — don’t try to push the boundaries of your financial stability. Research the market and connect with real estate professionals, or more experienced investors, even if you don’t plan to pool with them. You should also research loan options, and don’t be afraid to take a loan out on investment property, since the rent should ideally pay for the loan over the course of its lifetime. You can also save on costs with some DIY work.

There are a couple different ways to start off. One option if to find cheaper, smaller investments — including off-market properties, which are often at discounted prices — and work your way up after you’ve build up some equity. Another is to purchase a multifamily residence and live in one of the units, termed “house hacking.” This allows you to simultaneously only have one property’s payments to deal with, earn rental income, and accrue equity, with the tradeoff that multifamily properties have a higher upfront cost.

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Don’t Cut Corners On Your DIY Projects

DIY projects can save a lot of money. You may also be tempted to save even more money, or time, by skipping over important steps. It’s not worth it — if you make a major mistake, you’ll be out a lot more than if you simply got a professional to do it. You will still save money even if you make sure you’ve done everything right. Also, these are things the professionals would do anyway, so it won’t take any longer, though it may take more of your own time.

“Measure twice, cut once” isn’t just a figure of speech. It’s something professionals actually do, and you should as well. In fact, it doesn’t hurt to measure more than twice, especially if it’s not something you do frequently. But even before you measure and cut anything, you’ll want to know the exact layout of your home. That doesn’t just mean which rooms connect to which. Figure out where your pipes, electrical wiring, and supports are. You don’t want to accidentally damage the structure of your home by cutting or nailing into the wrong thing. When it comes time to figure out what you’re replacing parts of your home with, don’t skimp on the materials, and use proper tools. For many DIY projects, labor is the most expensive part, not the materials. Even for those projects with expensive materials, the higher price of quality materials is worth it, particularly since you can use the money you’re saving on labor to pay those additional costs. Finally, if you do end up making a mistake, don’t fall prey to the sunk cost fallacy. Just call a professional before you make things worse.

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After Move-In Checklist

Moving can be very stressful, and after completing a successful move, you probably want to just take some time to relax. But don’t forget to do your due diligence with settling everything that needs to be settled after move-in. To save you the hassle of wondering whether you’ve missed anything or not, here’s a handy checklist. They’re in no particular order, but they should all be done.

Update your mailing address. This is particularly important for bills and other services, but don’t forget about things like magazine subscriptions. The local post office can help you sort things out.

Set up utilities. If they’re not in service, make sure they are. If they’re already in service, change the name on record to your own name. These utilities include gas, cable, electricity, internet, telephone, sewer, and water. You should also check your smoke and CO alarms to make sure they’re working.

Determine the layout of your breaker box. Breaker boxes can be notoriously difficult to puzzle out, so it could take some time. Outside assistance is helpful to notice changes in different rooms as you figure out the switches.

Change your locks. Sure, you probably got the keys from the old homeowners. But who else has the keys? Their neighbor? Best friend? Parents? You have no idea. Better to change the locks and get a new set of keys.

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Permanent Versus Temporary Mortgage Buydowns

A mortgage buydown is an option to pay an extra upfront fee to reduce your mortgage interest rate. They come in two types: permanent or temporary. Permanent mortgage buydowns last for the entire length of the loan, resulting in decreased interest expenses at the cost of an upfront fee. Temporary buydowns last for a specified length of time, and typically are gradually phased out over the course of the buydown period. However, it’s possible for the upfront fee of a temporary buydown to exceed the interest reduction.

The decision of whether to take a permanent buydown or no buydown is relatively simple and only depends on whether you think you can afford the upfront payment. The decision of whether to take a temporary buydown or not is more complex. At first glance, those with a higher upfront fee than interest reduction can seem like a scam — paying more now in order to pay more over the course of the loan? Seems like a terrible idea. And it would be, if it were you as the buyer paying the upfront payment. However, with temporary buydowns, unlike with permanent buydowns, it’s most often something that the buyer requests that the seller pay for as part of the negotiation process. This way, the buyer gets to pay less in mortgage interest for a short time, and the seller pays extra to guarantee that the sale goes through. And if the upfront fee is less than the interest reduction, the buyer also has the option to pay for a temporary buydown themselves if the seller doesn’t want to.

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Paying Off Your Mortgage Early Isn’t Always The Best Idea

It can be very attractive to pay off your mortgage early. The reason for this is both financial and psychological. Paying down the principle means you’ll be paying less total over the duration of the loan than if you simply made the minimum payments, since interest is based on the principle, not the original loan amount. It will also give you some peace of mind to know that you no longer have any mortgage payments. But those aren’t the only factors at play, and depending on your financial situation, it may actually be better to keep making steady minimum payments.

Of course, if you can barely afford the minimum payments in your budget as-is, the decision is made for you. However, there could be reasons for someone who can afford to put a bit more towards payments to instead hold onto it. One reason is that mortgage interest payments are tax deductible. You may be paying more in mortgage payments, but paying less in taxes. Whether or not this is in your favor in your specific situation is a question for a tax professional. Another is the effects of inflation: as prices and therefore the cost of living continue to increase over time, as long as you make only minimum payments, the total amount you will have owed by the end of your mortgage doesn’t change at all. That means the amounts for payments made towards the end of the loan’s life tend to have lower value in terms of purchasing power, and may be less of an economic burden than other payments you may need to make.

The latter reason doesn’t mean much if you aren’t spending the money on something else, but there’s a good chance you should be. Savings funds, such as retirement funds, and investments both require money to be put into them to gain a profit later. If you don’t have money to invest, you won’t get any in return. Even holding onto the money can be useful, in case it’s needed for emergencies, or a very good investment opportunity crops up.

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