There are hundreds of thousands of people who believe, for one reason or another, they cannot afford to buy a home currently. Some people may not for any number of reasons but it would be very surprising to know how many who can buy but have gotten some bad information along the way. It's worth digging a little deeper to find out the facts. John and Karen have been renting a home for the last five years at $2,000 a month. During that time, the value of the home they were renting went up by $30,000 in value while the unpaid balance decreased by $18, 400. Even though they were fortunate enough the rent remained constant over the five years, they missed out on close to $50,000 of equity that the owner realized instead of them. Another thing to consider with today's low interest rates, it is quite common for a mortgage payment to be lower than a tenant is paying rent for a similar property. So, in this example, John & Karen paid more to rent than a house payment would have been … Continue reading...
Grilling Safety
More people grill in July, June & August than any other months and correspondingly, there are more injuries, as well as fires, due to grilling accidents in those months. Even though Labor Day is in September, we still need to be aware of safety. Close to 20,000 patients per year visit the emergency room due to injuries involving grills. Approximately half of the injuries involving grills are thermal burns. If you are around fire, there's a chance of getting burned. About 2/3 of American households own at least one outdoor barbecue, grill or smoker. Interestingly, gas grills contribute to more fires than charcoal grills. In addition, there are over 10,600 home fires started by grills each year. While grilling is associated with celebrations, good food, fun and friends, it is important to make sure that accidents don't interrupt your activities. Only use BBQ grills outdoors and in ventilated areas Place the grill away from home or anything that could be flammable … Continue reading...
Forbearance is Not Forgiveness
Forbearance is a temporary postponement of mortgage payments. The lender can grant this option to a borrower instead of forcing the property into foreclosure. The CARES Act provides protections for homeowners with mortgages that are federally or Government Sponsored Enterprise backed or funded such as FHA, VA, USDA, Fannie Mae and Freddie Mac. A mortgage holder should contact the lender to explain the temporary difficulty they are having making payments and ask for relief under forbearance or other options. Once the lender grants approval, it is important for the borrower to get the terms of the forbearance agreement in writing to be clear about when the payments will resume and how the missed payments will be recovered. Generally speaking, homeowners in a forbearance plan will not incur late fees and it should not adversely affect their credit. Unfortunately, borrowers must be vigilant to see that the lender is protecting them from delinquent credit marks according to their … Continue reading...
Building a Pool Is Just the Beginning
During the first major stay-at-home event that most of us have experienced in this country, a pool can give you and your family enjoyable recreation without leaving the home. For those without a pool, the NPD group reports that the Covid-19 pandemic has increased pool building by 161% this year. When your children are small, pools become a magnet for not only your children but their friends as well. It can also be a great place for the summer holidays, Memorial Day, 4th of July and Labor Day. Any day during the summer, especially on the weekends, can be an opportunity to enjoy the pool, cook outside and bask in the sun. Some of you may have even made the transition from your children enjoying the pool to your grandchildren. Usually, there is an interim where you may have wished that your home didn't have a pool so you would not have the maintenance and required upkeep. Then, the new generation of family starts using it regularly and again, you are glad you have a pool, so you'll … Continue reading...
Rethinking Home
The last two months of the new normal stay at home has led many homeowners to rethink the way they live in their home. It has now become an office for working at home; a school for children; a gym to stay in shape; and a place for recreation. The repurposing has people evaluating whether their home still meets their needs or if some changes are necessary. In some cases, adult children have moved back home, and, in others, there are parents who have moved in for the first time. Staying at home and sheltering in place is necessary but how much togetherness can one family take and how long is it going to last? Temporary is stretching into longer than expected and even when vaccines and treatments are discovered, will things really go back to the way they were? A home is a place to call your own; to raise your family, share with your friends and to feel safe and secure. Covid-19 has changed the scope of feeling safe and secure at home and may now be considered a sanctuary of … Continue reading...
Annual Advisory
Homeownership is a privilege and a responsibility. Even after decades of owning a home, you may still need some help to handle some of its challenges by focusing on the three "M"s of homeownership: maintenance, minimizing expenses and managing debt and risk. While many people recognize the benefits of annual wellness, financial, vehicle and equipment maintenance visits, an important checkup that you may not have considered is an annual homeowner advisory or real estate review. Why would you treat the investment in your home with less care than you treat your car or your HVAC system? Consider exploring the following: Do you know the current value of your home? (You can, by obtaining a list of comparable sales in your immediate area, as well as what is currently on the market for sale.) Have you compared your assessed value for tax purposes to the fair market value in order to possibly reduce your property taxes? Even if you've refinanced in the last two years, can you … Continue reading...
Why Keep Track of Home Improvements
Homeowners receive a generous exclusion on the gain of their principal residence up to $250,000 for single taxpayers and $500,000 for married taxpayers filing jointly. Most people probably consider the gain or profit in a home to be the difference between the purchase price and the sales price. IRS allows a taxpayer to lower the sales price by the selling expenses before calculating gain. Normal expenses like real estate commission, title policy, attorney fees, and other sales expenses may be included if they are normal and customary. Another significant adjustment is that capital improvements made during the holding period can be added to the cost basis. Normal maintenance like repairs are not considered improvements. IRS says that if the expenditure materially adds value (features) to the property, or appreciably prolongs the useful life of the property, or adapts a portion of the property to a new use, it can be considered a capital improvement. Examples could include … Continue reading...
Why have a mortgage during retirement?
You don't have to watch TV for long before Tom Selleck, Henry Winkler or Robert Wagner will tell you why seniors should consider a reverse mortgage. However, there are a seniors who are resisting the conventional wisdom of having their home paid for and opting for a mortgage with payments on their home. In some cases, seniors will downsize into a smaller home and have a large amount of equity to pay cash for the new home. In other situations, they may have their home paid for and decide to do a cash-out refinance which will require making payments. The logic behind either of these examples could be motivated by the fact that since mortgage rates are so low currently, the owners can reinvest the money at a higher yield and make money on their equity. This will give them more money for their retirement income. A common question that is asked by owners considering such a strategy is whether they'll be able to qualify for the new mortgage since they may no longer be employed. … Continue reading...
Shopping for a Mortgage
A lower rate will not only result in a lower payment, it will amortize the loan quicker. A $250,000 mortgage at 4.5% for 30 years will have a $1,266.71 principal and interest payment. At 4%, the same loan will have $1,193.54 payment saving $73.18 a month and the unpaid balance would be $1,776 lower at the end of five years. Mortgage lenders tend to price their mortgages based on the credit score of the borrower. The higher the credit score, the lower the mortgage rate. There is an inverse relationship that the lower the credit score, the higher risk and therefore, a higher rate is needed to balance the risk. In order to get a valid rate that will be available to you with your credit score, you need to be pre-approved. The process of making a loan application before you find a home, allows the lender to verify your credit, income, and ability to repay the loan. Lenders usually only charge the cost of the credit report for this type of service. Be … Continue reading...
Get Ready to Garage Sale
A well-planned garage or yard sale can give you extra space in your home, get rid of unused items and make some money but it needs some of the same considerations that any business needs to be successful. Start early to research and plan Promotion is key Display items attractively Price items right Organize checkout Determine the date of your sale, remembering that there are exceptions, but Saturdays are generally the best day. Experienced garage-salers believe that a well-planned one-day event will do as well as a multi-day event. Serious purchasers will look for the "new" sale and most people don't come back multiple days. Recognize that the first day of the sale will have the most people. Everyone will be looking for a bargain but some of them actually want to purchase things for them to resell at their own sales. Advertise in local newspapers and free online classified sites like Craigslist. If several families are … Continue reading...