It’s almost time for the kids to head back to school, which means cold weather isn’t far behind!
These 11 important household chores are great to do while you might still be able to find some summer helpers:
- Apply a fresh coat of paint to your window and door frames. Also, check for drafts, loose frames or cracked panes.
- Wash all windows and install storm panes as needed; to prevent heat from escaping, line the interior with insulation film and/or hang energy saver curtains.
- Add weather stripping to all doors as another energy saving measure.
- Check the insulation and wrap pipes in unheated locations.
- Clean and prep your furnace, wood stove, fireplace or back up generator.
- Prepare an “emergency” kit in case of power outages from snow and ice storms with some key items: food, important documents, family photos, flashlights and batteries.
- Clean clothes dryer vent pipe.
- Clean showerheads, bathroom drains and vents.
Keep in mind the following as the summer winds down. These are important outdoor tasks that should be completed once the fall season arrives.
- Clean, repair and store your grill, patio furniture and pool accessories.
- Prepare lawn mowers, leaf blowers, weed whackers and other yard maintenance equipment for storage; don’t forget to drain fuel from all gas-operated equipment.
- Close outdoor water valves and drain garden hoses.
From all of us at RMS, we hope you enjoy the rest of your summer!
You’re a good comparative shopper. From the grocery store to the financial calculator, you’re sizing up your options and making the wise choice for your wallet. Naturally, when looking at whether it makes sense to rent a place or buy a home, you do your research. And when you do, you keep finding people talking about “building equity” as a good reason to buy a house. Why? What’s so special about this equity business?
What is Home Equity?
You can think of Home Equity as the amount of the property you own that’s left when you take away the amount of the debt you have against it. For example, the red section below is the home’s equity:
A mortgage is a loan where you use your property as collateral, meaning if you fail to pay your debt, you hand over your property instead. That’s called Foreclosure and is generally considered no fun so let’s imagine for this example that you do continue to pay your bills.
Every time you pay that mortgage, a portion of that money goes toward the principal balance (there are mortgage programs that don’t work like this but they’re specialized “interest only” mortgage products and we’re going to assume that you didn’t get one of those for the sake of this example). Principal Balance is a fun way of saying “the amount that you borrowed.”
So, every time you make a payment, the amount that you borrowed goes down a little bit. It’s a trickle at first, but as time goes by that widens to a stream and your principal balance really starts shrinking.
The retail value of your property (meaning how much you could sell it for) will fluctuate with the mood of the markets and home buyer seasons, but history says that eventually that value should go up. Your potential selling price goes up while the amount that you owe gets paid down. This difference is your home equity.
What Does This Have to Do Deciding Whether to Rent or Buy?
The simplest way to look at home equity is as an investment. Instead of putting your money in the stock market or a savings account, you’re investing in your property. That’s why people talk about home equity when they’re comparing renting against buying. When you rent, your money is covering someone else’s mortgage, if they have one. They are the one building equity on the property that you’re living in.
What is Home Equity Good For?
That is a question with many possible answers. Some people pay off their mortgage and live happily ever after knowing that they have that equity there should they need to draw money against it in case of an emergency, college tuitions, etc. Some people choose to draw on their equity through refinancing or adding a home equity loan or home equity line of credit, which can be less expensive options than credit cards. One person’s needs and goals will be different from the next but building equity is a nice way to keep options open in case of those life events with large dollars signs attached.
If you look around the internet you’ll see “20% down payment” mentioned a lot. That must be the standard amount of money you need to save up in order to buy a house then, right? Your bank account and savings plan may be relieved to learn that there are plenty of down payment options, and yes, you can absolutely buy a home with less than a 20% down payment.
Well then, why is everybody obsessed with 20%? The quick answer is that it’s simpler to use as an example than mortgage options with a lower down payment. 20% down payment is the typically accepted level where you can get a mortgage without needing to purchase mortgage insurance. Mortgage insurance can be paid up front and/or spread out in monthly payments, so for the sake of showing a more attractive monthly payment and lower closing costs, or just keeping things simple on a mortgage calculator, 20% tends to be a default. That’s all. Just an easier set of numbers to start with.
“What does this mean for me?”
Don’t count yourself out because your savings account isn’t close to 20% of the price tag on the home you want. Conventional mortgage loans offer 3% down payment options. Government programs like FHA, USDA-RD and VA mortgage loans allow for low down payments and in some cases, depending on eligibility factors, no down payments. You have plenty of options.
This is where it makes sense to speak with a mortgage loan officer to take a look at your options. Bring your questions and talk about your goals. Is a low down payment the most important factor or are you able to put a little more money down up front in the interest of having lower monthly payments? How do these figures line up when you add closing costs to your considerations? There is no single right answer, but once you take a look at your options you may see the solution that works best for you.
The inspection vs. the appraisal. They both require a professional to walk through the property. Both tend to happen early in the home purchase process. Both point out potential flaws. So, what is the difference between a home inspection and an appraisal?
You’ve chosen the home. You made an offer, it was accepted, and a contract now bears your signature. There was a section in the contract that said you intend to have an inspection done on the property. Why then is your mortgage company talking about also hiring an appraiser? In short, they’re two different services that serve very different needs.
A property inspection primarily benefits the borrower. You hire a professional with a keen eye for trouble spots to go through the property with a figurative magnifying glass and provide you with a report of everything that could cause you grief. A property inspector isn’t going to be impressed by a new coat of paint and good furniture staging. It’s their duty to find the flaws and make you aware of what that could mean for your pocketbook or health. The inspection report is turned over to you, and depending on the findings, can be a negotiating tool between you and the seller.
A property appraisal is based on recent sales of similar properties in the area and informs your mortgage company of the estimated retail value (what it could sell for) of the property and also alerts them to potential areas of trouble. Since a mortgage is a loan where the house is used as collateral, the mortgage company needs to make sure that there is enough value in the property for this loan to be a good risk. Some mortgage programs also have guidelines that require certain parts of the property to be in good repair. Depending on the findings, the appraisal can also serve as a negotiating tool with the seller.
While the inspection tends to be optional, it is generally considered a good idea to purchase one so you won’t be blind-sided by costly or harmful issues that may be hidden from the common eye by a fresh coat of paint. Ultimately, that decision is yours. The appraisal is a necessary step in the mortgage process, so resign yourself to that cost. In the end, as you relax in your new home after move-in day, it can be argued that both up-front expenses were worthwhile.
It’s safe to say in today’s world that nearly everyone knows someone with an identity theft nightmare story to share. As technology takes steps forward so too do criminal minds. And while there’s no single answer to protect you from identity theft, there is plenty that you can do to minimize your risk and position yourself to react.
Here are 5 tips to protect your privacy:
Conduct a Credit Check-up
Visit www.anualcreditreport.com to obtain a free credit report every 12 months. Review the reports from all 3 credit bureaus and look for any suspicious activity, unusual or inaccurate names or addresses, or any inquiries that were done without your knowledge.
Stay Off the Pharm
“Pharming” is a term that describes hijacking your computer or hand-held device and stealing your personal information.
- Pharming sites are designed to look just like the website you’re trying to visit.
- Can track your movement within the site, such as entering personal information and passwords.
- May also direct your computer or device to give up other personal information at a later time.
When you visit a website, especially if you are taken there by a button or link, check that the address in the navigation bar is correct before entering any information. Look for misspellings. If in doubt, close the browser and start fresh with a new one, typing in the address or using an old and trusted bookmark of the site you wish to use.
Don’t Give It Up
In a phishing scam, identity thieves pretend to be someone from your bank, credit institution, etc. If someone contacts you and requests any personal information, don’t give it to them. Verify who is requesting the data and why, and then call the institution yourself using a phone number you look up separately. One extra phone call could save you a lot of trouble and money.
Return to Sender
Many identity thieves steal the mail they want from your mailbox or by rummaging through trash. To protect your privacy, be sure to:
- Know your statement delivery dates and pay close attention to any unusual delays.
- Shred any junk mail or other documents that may contain your personal information before you throw it away.
When applying for a mortgage or other kind of loan, you may become a “trigger lead” to the credit bureaus, who then sell your information to any number of companies. It only takes a few minutes to opt out at www.optoutprescreen.com, but that action could spare you a ton of junk mail, thereby possibly saving you from increased risk of identity theft. There may be some processing time from when you opt out to when you’re officially removed from the list, so try to make that one of the first things you do when you start the home buying or refinancing process.
With these five practices you are already taking steps to protect your privacy and identity. The most important factor in keeping yourself safe is to remain aware, and to trust your instincts if something doesn’t feel right. Use common sense and, when in doubt, take a few extra steps to make sure you’re dealing with the right people. If it’s insisting on calling a company back, they’ll understand. Companies doing business in today’s world have to be just as aware of potential privacy threats, or possibly more aware of them, as you.