It's Elemental: New Homeowner's Basic Maintenance Guide

It's Elemental: New Homeowner's Basic Maintenance Guide

Buying a home is an exciting experience. You save up your downpayment, wade through thousands of listings, find and hire a buyer’s agent, search for the perfect home, make and offer, get accepted and take the plunge. Now, you’ve moved in, repainted walls, arranged furniture, hung window coverings and settled in for the fall season.

Except, you’ve never checked a furnace filter, dealt with a leaky faucet, cleaned gutters or mulched your trees. If you’ve never owned a home before, you may be unprepared for the realities of home ownership.

What to do?

Remember the four elements:

  • Earth
  • Air
  • Fire
  • Water

Earth: While the temperatures remain warm enough, take care of any landscaping issues you may have. Rake and properly dispose of leaves, remove dead branches, give your lawn a final mowing and prepare it for winter, mulch flowerbeds and trees, cover any exposed dirt to protect it from erosion and check rock walls for loose stones.

Inspect your foundation for cracks that may need professional repair.

While you’re at it, put away outdoor furniture, toys and tools so that they’re protected from harsh winter weather and ready for Spring.

Air: One of the most important elements in your home, air, can be a friend or an enemy. Seal windows and add weather-stripping to doors for leakage. Check the attic insulation for the appropriate depth for your region. Inspect your attic fans, gable vents and other air-flow methods for proper ventilation.

Winterize your AC. Remove or winterize your window air conditioners. Wash off the condenser housing of your central AC and remove any buildup of leaves, dust, insect nests, weeds or grass clippings. Have a professional check your central air-conditioning system for leaks.

Fire: Your HVAC system (Heating, Ventilation and Air Conditioning) keeps your home comfortable in all temperatures, so take care of it well. Make sure filters are clean and free of damage. Have your furnace inspected by a certified HVAC technician. Check your ducts check for buildup and have the professionally cleaned if necessary.

Make sure the fireplace damper works correctly so that you can avoid losing warmth through the flue and check the chimney for debris from insects, birds or prior use.

Check smoke and gas detectors to make certain the batteries are new and the  alarms work.

Water: This element causes hidden damage in homes and requires vigilance to keep from having massive problems and expensive repairs due to mildew, mold, rot and other water damages. Outdoors, inspect your gutters and downspouts for leaves and debris. Make sure the downspouts are directed away from your foundation. Have your roof inspected to make certain you don’t have potential leaks. This is particularly true after a major weather event such has hail or heavy wind. A professional roof inspector can also advise you on weather your home might be subject to ice damage from dams and buildup.

Check your faucets for drips and your drains for leaks. Make sure pipes hidden in cupboards do not leak or create condensation. If you have condensation inside cabinets from water pipes you may need to install ventilation into the cabinets. Check toilets for leaking, running or flow problems and have them fixed immediately.

When to do it?

Check out this list scheduled by seasons to see the best times to take care of your home maintenance issues.

Contact your real estate professional for information on home inspections before you buy so that you’re prepared for the upkeep to your new investment.

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Lighten Up Dark Spaces Naturally

Lighten Up Dark Spaces NaturallyYou saved up your money and survived the rigors of mortgage underwriting, packed up your apartment, loaded the truck and moved into your new home. After several urgent days of unpacking, rearranging furniture and filling cupboards, you settle into your new place, ready to enjoy the pleasures of home-ownership.

You wake up on about day ten to the realization that your new home is a cave—literally! There is no light coming into your house. You know you have more space, but it feels like less.

Now what do you do?

Many older homes, especially those built in warmer climates, do not have the expanses of glass that newer homes boast. Some just have tall, narrow windows and other have small windows up near the ceiling. In times past, these smaller windows acted as a conservation measure. Less light into the home means a cooler home and therefore, a lower air conditioning bill. In winter climates, smaller windows translate into less heat loss and lower winter heating bills.

While your long-term plans may include enlarging window openings and installing high-efficiency windows, in the meantime, you need to lighten up your home so that you can enjoy it now.

Use a light hand when decorating

When the goal is to bring more light into a dark space, reflective surfaces are your friends.

  • Lighten up your paint.

Interior paint colors come rated by light reflective value (LRV). The LRV scale goes from zero percent—no reflective value— to 100%, which translates to a completely reflective “white” value. In the real world, neither zero percent (black), or one hundred percent (white) reflectivity exists, but other colors fall in the spectrum between the two extremes. For example, an average black (think chalkboard paint) may range about five percent while basic very white wall paint is nearer to 85 percent. Dominantly yellow colors may fall into the higher ranges as well.

You may find the LRV code on the back of a paint swatch, or in the “fanbook” that your paint retailer should have. The higher the code value, the more light the color reflects and the brighter your room will seem.

When choosing paint with light reflection in mind, you can maximize the daylight entering your smaller windows with a ceiling paint with a higher LRV, and complementary wall colors with slightly lower values to visually warm up your room.

  • Add reflective surfaces.

Use mirrors, glass and metallic surfaces to bounce the existing light around the room. Setting mirrors on opposing walls allows light to reflect into infinity. A mirror at the end of a narrow entryway allows it to appear more spacious and open. Use mirrors to balance walls with off-centered or asymmetric windows.

Adding metallic or glass tiles to a backsplash or shower increases the reflected light in a room. Or, simply add reflective touches to your décor such as silver or shiny brass sconces, metallic frames or crystal vases.

  • Avoid dark surfaces.

Dark window coverings, furnishings and area rugs absorb light too. When choosing Venetian blinds, pick white or anther light color rather than wood-grain or faux-wood styles. Blinds tilted toward the ceiling reflect light upwards, offering both light and privacy. You may achieve a similar effect with Panama shutters, but remember that the shutter frame may reduce the window opening, therefore diminishing the reflected light.

After you’ve saved up for renovations, consider skylights and solar tubes to increase your interior light without changing the historic design of your home.

Your real estate professional can direct you toward contractors to help you achieve the home of your dreams.

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Fall Filter Fixes

Fall Filter FixesOkay, some home maintenance items just don’t make the urgent list.

Changing your furnace filter doesn’t often make the cut. As we head into autumn, take a moment to check your furnace filter to get it ready for a winter workout.

Why your filter is important

A filter protects the blower on your furnace from dirt and debris. Its basic function is to keep the dirt from the air out of your furnace, but specialty filters can reduce airborne dust, remove allergens and pet hair, and improve air quality.

The filter’s location at the air in-take means that particle removal happens before air is heated and forced through your home’s vents. Since the air from your vents is clean, you may not notice that your furnace isn’t running efficiently, but a clogged it can lessen the life of your furnace. The extra wear and tear that pulling air through a dirty filter causes may lead to inadequate airflow, overheating and even complete shutdown of the system.

Ideally, you should check your filter once a month. If your system involves just a furnace, then check the filter monthly during the cold season and again in the fall just prior to cool weather returning. If you have a complete HVAC system, the filter affects your air conditioner as well. A dirty filter in the warm season can cause the air conditioner’s cooling coils to freeze up, stressing the AC system.

Here’s what to do

Experts suggest checking the filter every month and changing it at least every three. Check your owner’s manual for information on the filter’s location and the best size and type of filter to use. Determine if you have a disposable filter or a reusable filter. A disposable filter typically has a cardboard frame while a reusable one is made of plastic or metal.

  • Disposable:
    —Turn off the furnace system. This means shutting it off at the fuse box, the circuit breaker or a furnace cutoff switch.
    —Remove the cover from the filter holder.
    —Remove the filter from it’s housing either inside the furnace or at the return air vent. The existing filter probably has a marker indicating the correct position to install the filter so that the airflow goes toward the furnace. Make a note of this so you can correctly install the new filter.
    —On the new filter, look for the markings that indicate the airflow direction and match them up to the correct flow direction toward your furnace.
    —Replace the cover.
  • Reusable:
    —Turn off the furnace system. This means shutting it off at the fuse box, the circuit breaker or a furnace cutoff switch.
    —Remove the blower door or locate the filter in the return air vent.
    —Use either your regular vacuum or a wet/dry vacuum to remove dust from the filter. Vacuum the area around where the filter goes as well.
    —Wash the filter. You can do this outdoors using a garden hose or indoors in the bathtub or shower (although this is messier). Be sure to spray the water in the reverse direction of the airflow at the end to make certain no dust particles are left on the inside of the filter.
    —Allow the filter to dry completely before you reinstall it.
    —Check the filter for indicators of which direction should face the furnace and reinstall the filter, insuring that loops or clips are in their proper position.

If this seems like a lot to do, or if your furnace filter location is awkward, consider hiring a certified HVAC service to check, change or clean your filters for you.

If you’re planning to sell your home, keeping your furnace in great working condition contributes to its resale value.

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Can I Buy a Home with an FHA Loan If I have a Student Loan?

Can I Buy a Home with an FHA Loan If I have a Student Loan?This year the Federal Housing Administration made adjustments to its underwriting handbook that significantly affect potential buyers that have outstanding student loans. Changes became effective September 14, 1015.

The bottom line is, “yes” you can buy a home, even with an FHA loan, but there are stricter debt-to-income ratios you’ll have to comply with and new rules about gifts used toward your downpayment.

Here’s the scoop

In the past, if your student loan deferment went beyond the 12 months following your mortgage loan date, the future payment did not factor into your debt-to-income ratio. This meant you might qualify for a higher monthly payment. Other deferred debts, including those with balloon payments, also fell into the 12-month rule.

The new ruling includes the potential payment amount in the debt-to-income ratio, but here’s the rub: not only do you have to provide all documentation for the obligation, if you don’t know for certain what the payment will be, and can’t obtain that from the lender, your mortgage underwriter must include five percent of the outstanding balance for non-student loans and two percent of the outstanding balance for student loans into your monthly obligations. This formula could raise your monthly debt to income significantly.

A high a ratio of total household monthly debt payments compared to your income (DTI) signals that you carry too much debt. Chances are, you’re more likely to default on your mortgage. Traditionally, lenders want your DTI number lower than 43 percent to 45 percent. Above 45-percent applicants often find it tougher getting approved for a loan compared to borrowers with lower DTIs. Under the new restrictions, the FHA requires two percent of the outstanding student loan balance added into the calculation of the monthly DTI.

If you have a deferred student debt balance of $30,000, for example, the FHA ruling now imputes a $600 a month repayment obligation (two percent of thirty thousand) onto your DTI. This calculation is double the amount that Fannie Mae and Freddie Mac use to calculate your DTI.

If you have a non-deferred payment plan, the actual monthly payment will be counted toward your household debt along with any other debt obligations.

According to the FHA, its goal with the changes is to create sustainable affordable homeownership and not to place buyers in a financial situation that become unaffordable once they have to begin paying on their student loans.

More changes to the rules

In addition to the student loan and deferred obligation changes, the rulings on gifts from relatives and friends require stronger documentation from the giver’s financial institutions regarding the nature and amount of the gift. If a “gift” might have to be repaid, the FHA views it as a loan and requires the repayment amount to be included in the monthly obligations. In the past, “loans” between family members toward the downpayment of a home could be camouflaged as a gift. Analysts believe that since many people will be unwilling to expose their financial information to the extent now required, they may be less inclined to give the gift in the first place.

So, what should you do?

  • Stay current on any obligations that you have.
  • Collect the information and documentation for any deferred loan or obligation (including that 18-months-same-as-cash flat screen TV) so that you know the exact date you must begin payments and the exact amount of each payment. If you don’t’ know the exact amounts, contact the financial institutions for up-to-date information.
  • Once you know how much your monthly payments are going to be, start putting that amount into a savings account each month. Ideally, this should be a separate account from where you are saving your downpayment. Doing this for at least six months will prove to you and your lender that you are well able to keep up with the payments once the deferment ends.
  • If a family member offers a “gift” toward your downpayment, make sure it truly is a gift and will not require future repayment. Let them know that you are seeking an FHA loan and that you may need documentation from them regarding the nature of the gift during the underwriting process.
  • Live lean: don’t incur additional debt in the six to 12 months leading up to when you want to buy a home.

Let your real estate professional help you calculate the amount of home you can afford. The more time spent looking at the right homes instead of those out of reach, the sooner you’ll find that perfect space for you.

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There's an App for That

There's an App for ThatYou don’t know what you don’t know, so how many homebuyers or home-sellers know they can use their smart phones to get smarter about the process?

It doesn’t matter how far along in your home-buying process you’ve come, you can always tweak things to simplify your life. Adding these nifty apps to your smart phone frees up some of your time to find just the right home.

HOME by FannieMae™

The HOME by FannieMae app gives your resources to prepare your finances, figure out what you can afford, learn all about the process of buying a home, ways to plan for home maintenance and even calculate potential savings on future home mortgage payments.

It features a dashboard to help you keep track of how you’re moving through the process and even offers instructive videos.

HomeSnap

Available for both Apple and Android phones, this app features unique technology that instantly tells you all about any home you snap a picture of. You can learn how much it is worth, when it last sold and even how much it sold for. You’ll see information about the number of bedrooms, bathrooms and garage spaces. You can see the lot size and even the school district. The app gives you access to information about more than 90 million homes across the United States. For homes currently on the market, you may even have access to interior photos.

Using HomeSnap helps you narrow down your home search before you go to the effort to take home tours.

House Hunter

The HouseHunter app allows you to keep track of your entire search for your dream home. It stores information, notes and pictures for every home you look at and even allows a rating system so you can evaluate and compare each home you tour. Score each home based on requirements you specify with House Hunter’s proprietary scorecard system. View images of multiple homes at once to help you remember which house is which.

AroundMe

Not just for real estate, the AroundMe app shows you what you can find in any area. So, if your find the home of your dreams, you can also see the nearby hot spots, where to find the dry cleaners, restaurants and even hospitals. It can connect you with taxi services, points of interest and a plethora of other nearby information so that you can learn about a potential neighborhood quickly without having to do exhaustive searches.

Dictionary of Real Estate Terms

Every industry has its own language and LD Real Estate Dictionary is the app that can help you. From “points” to “policy” this app has more than 2000 common real estate terms and their definitions in common English. Navigate the massive paperwork with ease and understanding with this app.

Your agent’s mobile-friendly site

Best of all, your real estate professional’s own mobile-friendly responsive website can keep you connected to the latest listings so you can check them out on your way home from work. Check out the new listings, view stunning images and contact your agent all from the mobile site.

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School for Homebuyers?

School for HomebuyersNow that the kids have gone back to school, vacations are over and the weather is starting to turn, it’s time to get serious about hunting for a house. Homebuying used to be simple: you saved up some money for a downpayment, enlisted the aid of a real estate agent, found the home you wanted, made and offer and closed the deal. But since the housing meltdown, first-time buyers need savvy skills to negotiate the complexities of credit scores, pre-qualifications, pre-approvals, loan options and closing.

Last April, FannieMae announced its new HomePath Ready Buyer Education Program for first-time homebuyers.

Available completely online, you can attend homebuyer school from the comfort of your living room. When you “graduate” you may qualify for assistance for up to three percent of the purchase price in closing cost toward purchasing a qualified HomePath property. According to FannieMae, this means that on a $150,000 home, you could save up to $4,500 in closing costs on a HomePath qualified home. (Homepath homes are those owned by FannieMae.) More than that, unlike your college tuition, Fannie Mae says it will reimburse your $75 tuition cost at the time of closing on your new home. What could be better than that?

What you’ll learn

Buying your first home is daunting. You have your own fears of taking this gigantic financial step mixed with a boatload of new information, complex processes and paperwork, and new responsibilities. The daunting task of saving up the downpayment actually pales in comparison to the paperwork and meeting the other requirements of purchasing a home with a mortgage.

The total course should take you about four to five hours to complete and you’ll take a quiz (no daunting final exam here) at the end. In the nine, 30-minute sessions, you’ll learn:

  • How to determine what you can afford
  • Homebuyer pitfalls to avoid
  • Ways to decide which home to buy
  • Options for lowering your down payment requirement
  • The best things to include in your offer
  • How to navigate closing complexities

The course exceeds both HUD standards and the National Industry Standards for Homeownership Education and Counseling, but is designed to be both user-friendly and doable from you’re the comfort of your sofa, smart phone or tablet.

Eligibility for the closing cost assistance and reimbursement of the training cost requires that the buyer complete the entire HomePath Ready Buyer training course online and receive the Certificate of Completion.

Buyers must be first-time homebuyers. NOTE: A first-time homebuyer is defined as a homebuyer that did not own property in the last three years, so former homeowners affected by the recession that have improved their credit score can qualify for the program.

The buyer must plan to live in the property as their primary residence. That means that action or investor sales are not eligible.

Exclusive offers

Completion of the HomePath program offers buyers an exclusive “first look” at newly listed foreclosed properties. During the First Look™ marketing timeframe, buyers can make an offer on a foreclosed home without competition from investors, flippers and other buyers looking for a great deal. Utilizing the First Look program, Fannie Mae hopes to promote homeownership and be instrumental in contributing to neighborhood stabilization. When homebuyers can negotiate and purchase foreclosed properties before they are made available to investors, the potential for pride of ownership to lift the community increases.

Fannie Mae uses real estate professionals to complete the home-buying process, so if you’re interested in the HomePath program, contact your real estate professional for more information.

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Sell Your Home in Any Season

Sell Your Home in Any Season

As we slip into autumn, many homeowners take their homes off the market, believing that their home will not sell in the fall or winter. While it is true that selling heats up in spring and early summer, people buy homes every day of the year.

Historically, the selling cycle followed a general pattern of picking up in the spring and summer for buyers with young families, tapering off in late summer and picking up again in the fall. While colder months—particularly November and December—slowed down due to the holidays.

New studies show, however, that on average, homes listed between Halloween and New Year’s Day are more likely to sell, often sell faster and even fetch closer to the asking price. Typically, because there are fewer houses on the market, the competition for homes that are listed increases.

Shrewd buyers often seek bargains during these months, and buyers without children don’t set their buying guidelines based on the school year. The truth is that just as sellers’ situations differ (job change, young family moving for school, retiring), buyers’ situations range from new employment or business relocation to seeking a second home to celebrate holidays. Sellers that keep their homes on the market into the fall season significantly increase their chances of selling.

Reasons for off-season home sales include:

  • Less competition: Buyers believe the old “spring only” selling myth too. They may believe that in the fall and winter they won’t face the competition for a prized home that results in bidding wars and ultimately paying higher prices.
  • Personal motivation: People move when they need to, so a new job in a new town or a buyer finally saving up the last of their downpayment doesn’t depend on a specific time of year.
  • Age and situation: S. Census statistics show that older folk and those without children tend to move in the fall and winter months. In fact, by percentage of population movement, October rates higher (10.2%) than May (7.5%) and is nearly equal to both July (11.2%) and September (11.5%).
  • Internet shopping: Most buyers shop online first. That means they can shop year ’round, and all hours of the day or night. They can see images of your home online in all seasons, so they have a realistic expectation what your home looks like seasonally.

Before putting your home on the market

Assess your needs before listing your home. Do you need to relocate immediately? Do you have school-aged children you need to get into a new school system at the start of the school year? With more flexible relocation dates, you can adjust your selling period to the season that best reflects your home’s qualities.

Beach, mountain or lake homes may sell best in the early spring and summer months so that buyers can enjoy them in their first year, but if they can be equally enjoyed in fall and winter, play up those qualities. A mountain home near a ski resort may sell well in the fall and early winter, while a lake home in a colder climate will appeal to enthusiasts of other winter sports such as snowmobiling and cross-country skiing. Beach homes may be more attractive to snowbirds as fall and winter approach.

No matter when you need to sell, your real estate professional can guide you in the best ways to market your home for any season.

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New FHA Leeway for Approvals

New FHA Leeway for ApprovalsHaving a low FICO score usually means there is no way for you to quality for a FHA mortgage, but changes to the underwriting process August 2015 means that more borrowers may qualify. According to some analysts of the new policies, up to 100,000 new potential borrowers may now qualify if you can convince underwriters that you can make the payments.

Loans based on FICO score

Since the sub-prime meltdown, mortgage loans to borrowers with FICO scores below 660 fell below $150 billion per year overall and remain there. This lower number of loan originations, due to lenders shying away from loaning to borrowers with scores under 640 results from poor lender performance reviews for higher-than-average loan defaults.

Neighborhood Watch System

To encourage more borrowing to the subprime market, the Federal Housing Administration made enhancements to their Neighborhood Watch Early Warning System to better compare the performance of loans to borrowers with lower credit scores. The FHA hopes that more accurate assessment will improve underwriting processes to include other characteristics outside of FICO scores for determining creditworthiness.

FICO scores

The Fair Isaac Corporation (FICO), a company that provides software to calculate potential creditworthiness, developed a scoring system ranging from 300 to 850 points based on their specific formula. Access to your FICO score comes via the three major credit bureaus (Equifax, TransUnion and Experion). The FICO score, based on information each credit bureau keeps about you in your credit file, includes your credit history—loans and repayment, credit card usage, etc.—the age of your credit, and the types of credit you use. Your score can differ among the three bureaus depending on the information they have in their system about you.

What’s new?

Under the new system, FHA’s system for judging lenders changes to offer a more fair metric so that lenders to communities with a higher concentration of residents with lower than average FICO scores may offer loans without the fear of penalties simply because of where they focus their loan business. Borrows falling into the potential new category include:

  • Younger buyers
  • First-time buyers
  • Minority households
  • Moderate-income working families

Potential buyers recovering from job loss during the recession when they may have gotten behind on paying bills may now have an opportunity to prove their creditworthiness despite their FICO score. These are the people with a reliable income, an ability to repay their loan and acceptable debt-to-income ratios.

While some lenders may wait to see how the new metrics will work, others may begin offering loans and programs to take advantage of the opportunity. If you’re hoping to buy a home in the near future, but have wounds from the recession, don’t count yourself out … shop different lenders to see if you can qualify under the new underwriting guidelines.

If you’re looking for a lender, ask your real estate professional for recommendations for your situation.

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