Busting the 3 biggest private mortgage insurance myths

One of the most frustrating issues we’ve dealt with over the past few years is the confusion over private mortgage insurance (PMI). Folks on the internet aren’t helping clear the confusion; instead, many are feeding it with misinformation.

The truth is, the average down payment on a mortgage is around 11 percent, according to the National Association of Realtors. That’s a whole lot of homebuyers who are required to purchase PMI. Because of that, we’ve decided to help smash the prevailing myths about this despised yet necessary program.

What is PMI?

Private mortgage insurance protects the lender if the buyer defaults on the loan and it is generally required of borrowers who pay less than 20 percent as a down payment.

There are exceptions to this that we’ll explore, below.

PMI typically costs between 0.5 percent to 1 percent of the loan amount, each year. “At 5 percent down, private mortgage insurance (PMI) costs $150 per month on a $250,000 home,” according to the U.S. Department of Veterans Affairs.

 

Myth Number 1: “Government-backed loans don’t require PMI”

This one is partially true. The VA loan doesn’t require PMI. However, the loan does require most borrowers to pay what is known as a “funding fee” which helps mitigate the burden on the taxpayer should the borrower default on the loan.

FHA does require that borrowers purchase mortgage insurance, although theirs is called MIP, for Mortgage Insurance Premium. There is both an upfront fee and a monthly premium payment required.

The former is typically the same for all borrowers (1.75% of the base loan amount), while the latter depends on a number of factors, including the loan amount, the term and the loan-to-value ratio. The premium amount changes annually, so check with your lender to learn about current MIP rates.

Myth Number 2: “You cancel PMI when you reach 20% loan-to-value”

This myth is partially true. If you have a conventional loan you can cancel the PMI premium when you reach the 20 percent equity level.

By law (Homeowners Protection Act of 1998), however, your lender must cancel the policy when you accumulate 22 percent of the home’s original purchase price in equity.

If, on the other hand, you have an FHA-backed loan, you can’t cancel the MIP unless you sell or refinance the loan.

Myth Number 3: “PMI is tax deductible”

This was true a year ago, but for 2018 tax returns, at least as of September 2018, this deduction is no longer available.

The ability to deduct PMI is one of those tax code provisions that expire every December 31st. Since its inception in 2007, Congress has renewed the deduction every year, sometimes at the last minute.

Hopefully, it will be again, but most tax specialists aren’t holding out hope. So, for now at least, “PMI is tax deductible” is a myth.

We aren’t mortgage professionals so we urge you to contact your lender or financial advisor if you have questions about private mortgage insurance.

Tips to help you paint like a pro

Paint is the miracle cure for a home that needs freshening. It not only adds color, but, if the color is chosen strategically, it can make rooms appear larger, smaller and even cleaner.

The best part of painting as a home improvement project is that you can control costs by doing it yourself. The worst part is how much preparation is involved before you can put roller to wall. But, it’s critical that you prepare properly – it’s what sets you up for success.

Don’t head out to the paint store just yet. First, take a look at our list of what you’ll need.

What you’ll need:

Depending on the condition of your walls, you may not need to purchase this entire list.

  • Measuring tape
  • Plastic tarps
  • Canvas drop cloth or rosin paper
  • Painter’s tape or liquid masking tape (for windows and trim)
  • Spackling compound and spatula
  • Fine grit sanding paper
  • Sanding pole (optional)
  • Bucket of soapy water
  • Paint primer (optional)
  • Paint
  • Paint brushes and roller or paint sprayer
  • 5-gallon bucket with roller grid or a paint tray
  • 4- or 8-foot painter’s pole (for ceiling work)
  • Paint brushes

Preparation is key

You’ll need to know how much paint to purchase, so measure the area carefully. Start with the longest wall first, and “square that number for the ceiling,” recommends James Glave, of This Old House.

How to measure

Then, take that longest wall’s measurement and multiply it by its height, then multiply the result by four. Glave suggests that you double the number if you’ll be applying two coats. Or, you can wing it and use the rule of thumb (one gallon for each 400 square feet) or use a paint calculator, like the one at glidden.com or lowes.com.

Then, figure out whether you’ll use a roller or sprayer. To help you decide, read the results of Popular Mechanic’s “Brush & Roller vs. Paint Sprayer” tests.

Now you’re ready to go shopping for all the supplies you’ll need (see the list, above).

Pre-painting prep

On painting day, push any furniture that you won’t be removing to the middle of the room and throw the tarp over the top, ensuring that everything is covered. For extra protection, tape the bottom of the tarp to the floor.

Then, use the canvas drop cloths to cover the floor. The pros recommend canvas over plastic for several reasons:

  • They remain in place better
  • Paint spills dry quicker
  • They aren’t as slippery as plastic drop cloths

Canvas can be slippery, however on vinyl, hardwood and tile floors, so the pros at familyhandyman.com recommend rosin paper (available at home centers) to cover hard floors.

Next, you’ll want to protect any areas of the wall that you won’t be painting. This is where the painter’s tape comes in. Use it to cover electrical outlets and baseboards. The pros recommend that after you apply the tape “… over the wood, then run a putty knife over the top to press down the tape for a good seal,” according to Brett Martin at popularmechanics.com.

Discover the different uses for painter’s tape and how to use it with Ace Hardware’s handy video.

Liquid masking tape is ideal for protecting the glass in windows from spattered paint. Watch Mauro Henrique, painter for This Old House, apply it in this video.

Fill in holes and indentations in the wall with spackling compound. True Value Hardware offers a spackling walkthrough on its website.

Now it’s time to use that sanding paper to even out the spackle and other rough surfaces on the wall. Sanding also helps the new paint to adhere better. Attach the sanding paper to a sanding pole to make the job easier. Although these tools can be pricey, there are inexpensive ones available at the large home improvement stores.

The pros recommend that you sand the wall from the baseboards up to the ceiling and then horizontally at the baseboard and the ceiling.

“Don’t put a lot of pressure on the sanding pole or the head can flip over and damage the wall, Martin cautions.

Finally, use that bucket of soapy water to wash down the walls, ridding them of dust and any grime left after sanding. Allow the walls to dry completely before painting.

If you’ll be using primer, which is recommended if you need to cover crazy colors, stains or block odors (KILZ is one brand that is popular for odors), now is the time to apply it. By the way, Consumer Reports claims that their highest-rated paints include primer, so priming the wall before painting has become an unnecessary step.

Let’s get painting

What type of paint will you need?  Choosing the color is just the first step. You’ll also need to determine the best sheen for your situation. Consumer Reports offers a tutorial on the various paint sheens and the best projects for each.

Then you’ll be faced with a choice between oil-based and latex paint. Learn the differences at hgtv.com.

Most painting pros recommend that you start your painting project with the ceiling. From there, you’ll find varying recommendations ranging from saving the trim for last to doing it before the walls, right after or just before the ceiling is painted.

The pros at familyhandyman.com are among the paint-the trim-first gang, claiming it’s much easier to paint the trim before the walls. Since you will be covering anything you slop on the walls with wall paint later on, “you don’t have to be neat” when painting the trim, they say.

Know which types and sizes of brushes are appropriate for your situation. Once you get to the paint department the selection will boggle your brain. Sherwin-Williams offers a paint brush selection guide that will help you choose.

Tip: Pour paint from the can into a bucket or other container. This avoids transferring dust and dirt from the brush to the fresh can of paint.

“Once the trim is completely painted and dry (at least 24 hours), tape it off (using an ‘easy release’ painter’s tape),” they conclude.

If you’ve opted for using a roller rather than a paint sprayer on the walls, you’ll need either a 5-gallon bucket with a roller grid or a paint tray to hold the paint. Pros recommend the former and you can learn why at thisoldhouse.com.

Learn how to choose a roller at purdy.com.

If you need additional DIY painting tips, check out this brilliant video produced by This Old House.

DIY staging tips that won’t break the bank

OK, so you don’t have a warehouse full of designer furniture, accessories and home décor items or a degree from an interior design school. Don’t let that stop you from fashionably staging your home before you put it on the market.

Staging isn’t merely the act of decorating a home; it is primarily an appeal to emotions. A lot of psychology goes into determining colors, textures and furniture arrangement.

You can see this psychology in action in model homes. Every element of each room is thoughtfully chosen to evoke an emotional response from the potential homebuyer.

Overall, the designers hope to create desire – they want to create a sense of longing for the home. How they get there is by making homebuyers see themselves living in the home.

The first rule of home staging

There’s a reason that most articles you read about home staging start with the admonishment to “clean the home.” Studies show that clean homes sell faster and for more money than dirty homes.

And, by “dirty,” we don’t necessarily mean slovenly. Something as everyday as a pile of laundry, dishes in the sink or children’s toys scattered about can turn off a potential buyer.

“You’re asking people to forgive the mess and still pay top dollar,” stager and interior decorator Darrow Samberg tells Lena Katz at forbes.com.

By “clean,” we mean from-the-ceilings-to-the-baseboards immaculate. Yes, it’s challenging to keep it that way while the home is on the market. But, it will help the home sell quicker than it would if you don’t take the time to clean.

Another hot topic among those who write about staging is “depersonalizing” the home. Most will advise you to remove family photos, certificates, diplomas, kids’ artwork, collections and anything else of a personal nature from the shelves, walls and surfaces of every room.

By doing so, you not only allow potential buyers to more readily see themselves living in the space, but you’ll also be taking steps toward decluttering the home (the third step in the pre-staging process).

Get rid of clutter. This includes the aforementioned collection of items on countertops in the kitchen and bathroom, stacks of newspapers and magazines and anything else that isn’t decorative. 

DIY staging on the cheap: Start with your furniture

The best way to make a small room appear larger is to remove overly-large furniture. Then, rearrange what’s left so that it advertises the purpose of each room.

In other words, move the baby’s changing table out of the master bedroom and ditch that exercise equipment that clutters the family room.

Next, arrange the furniture that’s left to maximize space and create a cozy feeling. Pull the living room and family room furniture away from the walls and reposition chairs, sofas and coffee tables to create a conversation area.

The pros at Better Homes & Gardens suggest “arranging the seating pieces to face each other over a shared coffee table …”

Spiff up kitchens and bathrooms

For years, surveys of homebuyers have shown that the most important rooms in a home are the kitchen and the bathroom. It only makes sense, then, that your attention should be focused on these two rooms.

Thankfully, there are easy, inexpensive DIY projects that require nothing more than a bit of energy. Start by removing everything from the drawers and cupboards, thoroughly cleaning the interior of all of them and then returning to them only what is absolutely necessary.

Arranging the contents neatly gives the impression of roominess and storage space is a hot button for many buyers.

“Turn all coffee cup handles facing the same direction,” suggests Elizabeth Weintraub at the balance.com. “Buyers will notice and think you are meticulous about the rest of the home, too.”

Speaking of cupboards and drawers, consider purchasing new hardware for them if yours are dated.

Bathrooms are easy to update on the cheap. A fresh coat of paint (even on the cabinets, if needed), new lighting and fresh, matching linens will help add a wow factor to a dated bathroom.

Additional ideas

Here are some inexpensive ideas to get your creative juices flowing:

  • Tour model homes to get staging ideas. Don’t forget to take your camera to snap photos so you can copy the décor.
  • Go through the attic, basement and garage, looking for anything you can use in staging.
  • Shop for decorative pieces, if necessary. Craigslist.org, flea markets, garage sales and second-hand stores are great places to find inexpensive decorative items. Look for art work, vases, baskets, rugs, mirrors, pillows and any other items you need to stage the home.
  • Create focal points by adding colorful accents.

Some additional tricks of the trade include painting, which gives every room and instant makeover,  and replacing faucets in the kitchen and bathrooms.

Use the internet for more ideas: HGTV’s “Designed to Sell,” Better Homes and Gardens and A&E’s “Sell this House.”

Your baby nursery is beyond cute — but is it safe?

The reality that you’re bringing a new life into the world is never more evident than when the nurse rolls the bassinet into the delivery room, right?

It’s at that moment that you realize (between contractions, most likely), that without a doubt, you’ll soon be a parent.

It may also be when you begin to question whether you’re ready. In all the excitement of choosing paint colors for the nursery and shopping for baby paraphernalia, did you miss something important?

Bringing baby home, at least for first-time parents, is joyous, but it can also be stressful. After all, books can only tell us so much about caring for infants. Reality is the real teacher.

So, let’s get rid of some of that stress by ensuring your home is a safe and welcoming place for the new addition to your family.

The best nursery is a safe nursery

Did you know that babies cry more in yellow rooms? The color apparently “activates the anxiety center of the brain,” Carlton Wagner, director of Wagner Institute for Color Research, tells Ava Van de Water, Cox News Service.

“In infants, it results in crying. In adults, it results in shortness of temper. We notice a lot of fighting,” in yellow rooms, he said.

You may want to keep that in mind when choosing the color scheme for the infant’s nursery. And, maybe the master bedroom as well.

More important than color, however, is the paint’s chemistry. It could be one of several sources of air pollution in the home. To be safe, choose a water-based paint that has no VOCs, which is short for “volatile organic compounds.” Then, skip the primer as a base coat.

To make it even more complicated, the Federal Trade Commission cautions that you also choose a zero-VOC colorant.

“And while the base paint may be low-VOC or VOC-free, the colorant may be anything but. In fact, tinting can significantly increase the VOC level of a paint, depending on the color choice,” they warn.

“The bottom line: if you want low-VOC paint, look for low-VOC base paint and low-VOC colorant.”

But wait — there’s more. According to an Underwriter Laboratories study, “paint VOC content should not be used as a proxy for paint VOC emissions into indoor air, as there is no correlation between the two measures.”

If this is of particular concern to you, consider choosing paint from companies that specialize in baby-safe formulations, such as Bioshield, Lullaby Paints, Colorhouse Paints, Green Planet Paints and Ecos Paints.

Read the labels carefully and compare the ingredients to the Material Safety Data Sheet (MSDS) database at msdsonline.com, msdsprovider.com and the Environmental Health and Safety Department at the University of California.

Airborne chemicals affect the smallest among us far quicker and easier than they do older children and adults. Sadly, they’re emitted not only by paint, but furnishings, household cleaning products and floorcoverings as well.

Most of the gasses are released from carpet within the first 72 hours after installation, but it will continue emitting gasses at lower levels for up to five years, according to the EPA. Suggested replacements include tile and hardwood, although there are newer versions of vinyl that boast low emissions.

Even the furnishings you choose for baby can be a source of toxic emissions. ABC News furnished a nursery for an expectant Mom and Dad and then brought in an indoor air quality technician to test the air.

The result? The lab results of the air in the nursery tested positive for a whopping 300 chemical compounds.

For comparison, they also tested the air right outside the home and found only two chemical compounds. Watch the video here.

From the crib mattress to the rocking chair, keep an eye out for non-toxic products when shopping for nursery furnishings. Avoid buying used cribs, look for GREENGUARD Gold Certification and avoid products made overseas. In 2015, for instance, nearly 5,000 cribs and other furniture manufactured in Chile were recalled when it was found they were painted with lead-based paint.

Learn more about making your nursery baby-safe at consumerreports.org and the U.S. Product Safety Commission.

Tips for House Hunting when Relocating to a New Area

The best part of moving to a new town or city is the newness of the whole thing. Getting to know the amenities, finding a new favorite eatery, new parks, new people and a new lifestyle is exciting stuff.

The most challenging aspect of relocating to a new area is finding a place to live, especially if your new town is a significant distance from where you now live. It is a challenge that is, thankfully, not insurmountable.

Secure the Services of a Real Estate Agent

Your number one source of neighborhood information should be your real estate agent. Have you chosen one yet? Let’s take a look at some quick tips for finding an agent in a new area.

Check real estate agents’ websites

Be aware that when you do an online search for “real estate agents in” whatever city you’ll be moving to, the first page of results may be filled with the big real estate aggregator sites, which are useless for your purposes.

Scroll down until the actual agents’ sites start appearing in the search results. You may have to view several pages of search engine results to find a handful of agents to consider.

Take a deep dive into the websites, looking for someone who offers lots of local and neighborhood information. Since you’re new in town, this information is vital in helping you find your ideal neighborhood.

Call the agents

Calling the agent for the first time is an important step in the process as it presents the first “test” of whether or not to work with the agent. You’ll find that most of the time you’ll get an agent’s voicemail.

Very few of them answer their phones and if you find one that does, give him or her extra points. Leave a concise voicemail telling the agent that you will be relocating to his or her area and need help finding a house. Don’t forget to leave your phone number and the best time to reach you.

Deduct points for any agent that takes over three hours to return your call and disregard any agent that doesn’t get back to you within 24 hours of your initial call.

Get to Know the Area

The problem with being an “outsider” is that it’s difficult to know which neighborhoods suit your lifestyle.

Sure, you can go online, do a Google Earth search and check out the surrounding areas, but that really tells you little about what it’s like to actually live in the different areas of any town or city. That type of information is best obtained by asking folks who actually live in the area.

Visits to the area before moving present the best opportunity to get a feel for what it will be like to live there. Even if you can’t visit, however, you should use the Internet and your real estate agent to research the following items, if they are important to you:

  • Cost of living
  • Home prices
  • Schools
  • Transportation
  • Crime rates

Don’t forget to determine commute times from the neighborhoods you’re interested in and the cost of parking if you’ll work in a downtown building. These outlays can add significantly to the cost of living in a new area.

While most people will tell you that finding a house when relocating to a new area is stressful, don’t believe it. With the right real estate agent to guide you, it should be adventurous and exciting.

Call us if you’d like a referral to an agent in your new hometown. We’re happy to help.

5 Blogs for new homeowners

Although homeowners have been DIYing home improvement projects for more than a century, the growing popularity of HGTV has resulted in a surge of its popularity and an explosion of America’s home renovation and décor market.

Last year, Americans spent $314 billion to upgrade their homes and that number is expected to grow by 7.5 percent in 2018, according to the Joint Center for Housing Studies of Harvard University.

While home improvement TV shows get a lot of the credit for the rise in DIY project popularity, don’t discount the contributions of the many expert bloggers who help us get the jobs done.

We’ve rounded up five of our favorites (posted in no particular order) that we feel every new homeowner should be following.

Vintage Revivals

One of the first things you’ll notice about Mandi Gubler of Vintage Revivals is that she is fearless. Take a look at the “home” she fell in love with and what it would take to get it where she wanted it and you’ll agree.

When she began blogging, she admits she knew nothing about decorating, and understands that her average follower may not either. She’s sure come a long way.

Redoing a 1973 Bell camper is impressive, but as far as we’re concerned, taking on “The Merc” (the home she bought) gives her serious DIY cred.

The next thing you’ll notice is that she’s brutally honest. The “DIY Gone Wrong” section of her site attests to that.

Finally, it’s her brilliant sense of humor that keeps us coming back. For instance, she decided that she wanted to compete with other bloggers so thought about transforming Vintage Revivals into more of a lifestyle blog. So, she started with fashion. See her hilarious post here.

Keep up with Mandi on Facebook, Twitter, Pinterest, Instagram, and on her YouTube channel.

Get Busy Gardening

Oh, how we love, love, love this blog! With so many DIY blogs dedicated to interior projects, and our love of the exteriors of our homes, this one sounded a note with us.

Although Minneapolis resident Amy Andrychowicz, creator and head honcho of Get Busy Gardening focuses on “DIY gardening for the beginner on a budget,” you’ll find lots of interesting tips for even the most experienced green thumber.

One of the things we like most about Amy’s blog is that it’s not only easy on the eyes, it’s a snap to navigate.

At Get Busy Gardening, the beginner can learn how to figure out your garden’s sun exposure, how to transplant and she offers garden plans to help you get started. And, if you crave yet more newbie information, check out her books on everything from propagation to pest control.

Follow Amy and Get Busy Gardening on Facebook, Twitter, Pinterest, Instagram and on her YouTube channel.

Poppytalk

Earl Einarson and Jan Halvarson, the talent and brains behind Poppytalk, hail from north of the border (Vancouver, to be more specific). With more than 9 million followers and features in Wired, House and Home, InStyle and others, they must be doing something right.

First, Poppytalk isn’t a DIY blog, per se, but more of a curation of brilliant ideas. If you’re looking for inspiration, we suggest you start here. From Ikea hacks and how to create a jungle on your urban patio to where to buy summer-themed art, there is no shortage of ideas on how to decorate your new home.

Follow Poppytalk on Facebook, Twitter, Google+, Pinterest, YouTube and Instagram.

Addicted 2 Decorating

If you’re addicted to room makeover before-and-after photos, you’ll love interior decorator Kristi Linauer’s blog.

Reupholstered wing-back chairs? See the brilliant before and afters here.

We love the variety of project walk-throughs Kristi offers, from how to clean an area rug and make your own stunning artwork, to a complete kitchen remodel.

She calls herself an interior-decorator-turned-blogger and Addicted 2 Decorating is dedicated to bringing you tips and tricks for low-cost decorating.

Follow Kristi’s DIY decorating escapades on Facebook, Pinterest, Instagram, Google Plus, Twitter and on her YouTube channel.

Remodelaholic

Take one look at the “Projects” section at Remodelaholic and you’ll understand why we included this one on our list. Here, you can learn everything from edging your yard and painting a concrete patio to drywall installation.

The tutorial we like the best is DIY stains. Seriously – Cassity teaches us how to make stains from household items.

Cassity is a mom, a wife with a husband she describes as “a dream” and a brilliant DIY blogger. Follow her on Facebook, Google Plus, Instagram, Pinterest, Twitter and on her YouTube channel.

3 Reasons your Home isn’t Selling

A home languishing on the real estate market is one of life’s more frustrating ordeals. Especially if you’ve owned the home for some time, there’s that emotional attachment that tells you, “Hey, this is an incredible house. It should sell really fast!”

If you’re under contract on another home or if you need to relocate there is also the need for speed.

There is no reason, at least not in the current market, that a home in good condition and in a desirable area shouldn’t sell. Homebuyers are clamoring for these homes.

There are several common reasons that homes don’t sell and one of these may just be the solution to your problem.

1. The home is overpriced

The most common reason a home sits on the market is because it’s overpriced. Asking too much for the home could be a result of you ignoring your real estate agent’s pricing advice,  an error on the part of your real estate agent or because the market corrected and your agent didn’t notice.

Regardless of the reason why, you’ll need to drop your price, as soon as possible, to renew interest in it and get it sold.

In a nutshell, homes sell for what buyers are willing to pay, not what sellers hope to get. The only way to know what a buyer is willing to pay for a home like yours is to check the sale prices (not the asking price of active listings) of homes similar to yours.

If it’s less than what you’re currently asking, I urge you to drop the price. The price reduction may just be the key to getting more buyers through the front door and, thus, to the home selling. 

2. Your home needs work

We’ve noticed that the homes that sell the fastest are priced right and they’re in good condition. What do I mean by “good?” They have curb appeal – the exterior reflects pride of ownership, not necessarily opulence. The trim is painted, the siding is in good condition and the landscaping is tidy.

Inside, the paint is fresh, the carpets clean and the house is neat. The buyer has the impression that he or she can move right in and not have to work to make the home livable.

Because we tend to be “married” to our homes and don’t notice their flaws, the ideal way to get feedback on its condition is for your agent to solicit it from the buyers’ agents who’ve brought their clients to the home.

If your agent isn’t doing this, he or she is doing you a disservice. Ask your agent to do the follow-up – you are, after all, paying him or her. Which leads us to reason number 3 that your home isn’t selling.

3. You have a lousy real estate agent

Your real estate agent’s primary job is to market your home. If it’s priced right and in good condition, the next biggest reason it’s not selling is because you have an agent who is failing at the marketing game.

Get together with your agent and find out what is being done to market the home. If the only marketing that’s been done is a sign in the front yard and an MLS listing and, perhaps, a blurb on the freebie websites, consider finding another agent.

It’s a lesson many homeowners learn the hard way: Never hire an agent that doesn’t consistently make enough money to offer a powerful marketing plan. It’s the essence of what you’re paying for and you should demand the service you deserve.

If you follow numbers one and two, above, and you are convinced your agent is doing a stellar job, ask yourself if you’re flexible enough in showing the home.

We know from our own listing clients that the worst part of selling the home is having to keep it in model-home condition despite life continuing to happen – kids, pets, guests and all of that.

Buyers work too, and often the only time they have to look at homes is in the evening or on weekends. Accommodating last-minute requests to see the home earns bonus points (at least with us!) and gets you even closer to selling the home.

Even in the hottest sellers’ markets there are slow periods, so if you’ve done all you can to ensure that your home is competitive, relax and give it more time.

Prevent home repairs by breaking these 5 bad habits

“Deferred maintenance.” It’s a term that real estate professionals hear frequently. It describes a home that has been neglected and raises red flags concerning its condition.

Putting off routine home maintenance can not only lead to big, ugly, expensive problems down the line, it causes a significant loss of your home’s value when it comes time to sell.

Let’s take a look at five of the most common problems and all of them can be prevented by changing bad habits.

1. Kitchen drain abuse

Although it’s easy to assume that the garbage disposer can grind up just about anything you throw at it, use caution. Everything that you put down there will end up in the drain pipes. Some of it will exit with ease while other substances can sit, accumulate with others and cause a great-big headache of a clog.

Grease and oil are the most common culprits when it comes to clogged kitchen drains. Plumbers recommend pouring the grease into an old coffee can or something similar. Let it sit until it cools and congeals and then throw the container in the trash.

Garbage disposers don’t properly grind up certain fruit and vegetable peels, such as apples and potatoes. Peel them over a trash container instead.

Starchy foods, such as rice and pasta will swell with the addition of water and coffee grinds should never be poured down the drain.

In fact, according to the pros at atomicplumbing.com, “Nothing causes more blockages and clogged pipes than coffee grounds and grease. Even if you don’t put them down the drain at the same time, they’ll meet up and form a sludgy impenetrable nightmare.”

2. Neglecting the gutters

Whether it’s your fear of heights or because they’re easy to forget, the gutters around your home need your attention. When debris, such as leaves and twigs, builds up, it blocks the free flow of water. The water will back up and can damage both the exterior of your home and the roof’s eaves.

“If you let gutter cleaning go by the wayside, it can cost you hundreds or thousands of dollars,” Jeff Lambert with The Gutter Man in Houston tells angieslist.com.

While you’re at it, don’t forget to clean out the downspout as well. Lowe’s has produced a handy video that will walk you through the process.

Gutters should be cleaned out every three months, according to the experts.

3. Not replacing the AC filter

Allowing your HVAC filters to become clogged with fuzz can end up costing you a fortune.

“A system that has a dirty filter can suffer from pressure drop, which can lead to reduced air flow, or ‘blow-out,’ resulting in no air infiltration at all,” according to Nick Gromicko and Kate Tarasenko with the International Association of Certified Home Inspectors.

This causes the system to have to work harder and “any mechanical component that has to work harder to run efficiently puts undue stress on the whole system, which can lead to premature failure, resulting in repair or replacement,” they continue.

Here’s some incentive to help you remember to change the HVAC filter every month to three months: The average cost, nationwide, of a new air conditioning system is $5,369 (according to homeadvisor.com) and you can pick up a new filter for less than $1 at the big home improvement stores.

4. Taking the water heater for granted

We don’t know why, but one of the most common complaints of new homeowners is that the water heater broke down shortly after they moved into their home.

The purchase and installation of a new water heater averages to $1,048, nationwide. If the unit failed because of a burst pipe or leak, plan on paying an additional $4,000 (after the insurance deductible) or so to fix the damage, according to the Insurance Institute for Business and Home Safety.

But, with a little maintenance you can extend the life of this oh-so-important appliance. Check out the video walk-through of water heater maintenance at thisoldhouse.com.

5. Ignoring plumbing leaks

Homeowners can save 10 percent on their water bills just by fixing leaks, according to the U.S. Environmental Protection Agency. But, that’s just the beginning of how much you’ll save.

Leaky plumbing allows moisture to seep into floors and walls and, if ignored long enough, can cause damage that may cost thousands of dollars to repair.

Some leaks are easy to diagnose (a dripping bathtub faucet for instance). Others may take a bit of sleuthing.

Plan on performing a routine inspection of the home’s plumbing system at least once a year. Check the toilets for worn flappers and check all under-the-sink valves for signs of moisture leakage.

To determine if your home has hidden leaks, the EPA recommends that you check your water usage “during a colder month, such as January or February. If a family of four exceeds 12,000 gallons per month, there are serious leaks.”

Another way of detecting hidden leaks is to jot down the reading on your water meter and then don’t use the water for two hours. Check the reading again. If there’s a change, you may have a leak.

Colorado’s Thornton Water Works offers a video to walk you through looking for hidden leaks.

My mortgage application was turned down. Now what?

Sure, the results of an appraisal and the home inspection can stop a real estate deal dead in its tracks, but what if you never get that far in the process?

What if the lender turns down your loan application – is there anything you can do to buy a home?

That depends on why the lender denied your application, and there are several possible reasons.

Let’s take a look at them and see if we can’t get you back on track to buying a home.

Low or insufficient credit score

Pulling your credit report will be one of the lender’s first tasks and low or spotty credit records are the most common reason that someone is denied a mortgage.

If you applied for a conventional loan and were turned down for this reason, consider applying for a loan using an FHA-backed mortgage.

The score requirements are a lot more relaxed and lenders are more likely to take a chance on you when the government is promising to repay them should you default on the loan.

Another way to approach the credit score problem is by paying a larger down payment, if you can afford it. Lenders take large down payments quite seriously and are willing to overlook other problems with the application when the borrower has some “skin” in the game.

Plus, the larger down payment will bring down the amount you need to borrow.

If none of these alternatives work, take a break from house hunting while you work on your credit score.

The experts at Fair, Isaac and Company, or FICO as they are known, remind consumers that “repairing bad credit is a bit like losing weight: It takes time and there is no quick way to fix a credit score.”

Get current on any bills you’re behind on and pay all bills on time going forward. Reduce your debt as much as possible and keep the balances low on your credit cards.

Lower your ratios

One of the aspects of your finances that the lender’s underwriter scrutinizes is your debt-to-income ratio (DTI). If they turned you down because yours is too high, get to work lowering it. There are three ways to do this:

  • Increase your income
  • Lower your debt
  • Do a combination of both

Unacceptable employment history

The days of the so-called “liar loans” are long gone and today, lenders look for at least two years of consistent job history, either with the same employer or in the same industry. Even the self-employed applicant will need to meet this two-year benchmark.

If your loan denial is the result of unacceptable work history, consider waiting until you have the required amount of time on the job before reapplying.

Otherwise, keep shopping around for a loan but chances are, most lenders will deny your application for this reason.

Last minute denial

Just when the purchase seems to have overcome the most common obstacles and you’re mentally moving in to the home, the lender sends you a message that your loan has been denied.

How can this happen?

Two reasons come to mind: the appraiser said the home isn’t worth the amount of money you want to borrow or your financial situation has changed since you first applied for the loan.

Lenders will perform one last pull of your credit information just before closing, so it’s important that your financial situation remains consistent from the time escrow opens until it closes.

Don’t make major purchases on credit, don’t apply for new credit, don’t switch jobs or banks

We aren’t mortgage professionals but are happy to refer you to one should you have any questions about getting a loan, or about the mortgage process in general.

3 ways to wreck your home’s value

As a homeowner you know that the best way to protect your home’s value is by maintaining it. And, when it comes time to sell it, you’ll find lots of ways to increase its value.

On the flip side, there are few folks willing to tell you how to wreck your home’s value. Until you met us, that is.

Use this list of tips as a cautionary tale – unless, of course, you really want a decrease in value.

 1. Convert your garage

More than half of homebuyers want a 2-car garage and 86 percent want a garage with storage, according to a survey conducted the National Association of Homebuilders.

So, although you may think of yours as wasted space or just an oversized junk drawer, carefully consider what a garage conversion can do to your home’s value.

A Sacramento appraiser found that homebuyers paid between 6 and 10 percent less on homes with no garage, regardless of what replaced it.

On a $200,000 home, that’s a loss of between $15,000 and $20,000.

Ouch

If you are thinking of selling the home, consider some garage upgrades that may increase its value and make it more attractive to homebuyers. These include:

  • A new garage door. According to Remodeling Magazine’s “Cost vs. Value” report, homeowners who installed a new garage door saw a 98.3 percent return on their investment.
  • Adding additional storage options, such as shelves and cabinets. Consider overhead storage, suspended from the ceiling, to utilize the wasted space above the cars. It’s quite popular and will catch a buyer’s eye.
  • Make the garage look brand new by power-washing the floor and applying an epoxy floor coating (This Old House offers a walk-through of the process). Then, paint the walls with a semi-gloss paint.

2. Don’t snitch to the HOA about bad neighbors

If your community is governed by a homeowners association, you pay dues. Even homeowners with low fees should expect their association to enforce its rules and regulations.

To not take advantage of their power when a neighbor is messing with your home’s value is just not smart. Consider becoming a “snitch” if any of the following occur in your neighborhood:

  • The hoarder: Nearby property that is cluttered with a homeowner’s junk can reduce your home’s value by 5 to 10 percent, according to the Appraisal Institute. If the exterior is extra-packed with debris, you may lose even more value.
  • The loud neighbor: Most associations have a noise ordinance in their rules, and for good reason. Not only are loud neighbors disruptive to other residents, but their (and their pets’) noise can reduce home values by another 5 to 10 percent.
  • Unsightly vehicles: Many HOAs prohibit residents from parking commercial vehicles, boats and large recreational vehicles on the property. If yours does, and a neighbor is violating the policy, contact your HOA and file a complaint.

3. Install a pool

In some parts of the country, such as Las Vegas and parts of Arizona, a pool adds value to a home. It may also add value if you live in a neighborhood where most of the other homes have pools.

In other regions and other neighborhoods it may or may not and in yet others, a pool is considered an expensive inconvenience and a liability and can drag down the value of your home.

Not only that, but a pool knocks some buyers out of contention. Unless it offers security features, the pool won’t be popular with families with young children.

Consider that the average cost for a complete pool installation will cost between $30,000 and $100,000 according to Jean Folger at Investopedia.com.

Then, in some states and municipalities, fences around the water feature are mandatory, so factor in that cost. Find out if yours is among them at signs.com.

Ongoing maintenance may cost a bundle as well. “The pump and heater, if you have one, could drive up your utility costs by $100 a month or so,” according to the folks at daveramsey.com.

“You’ll spend about $600 during the swimming season on chemicals if you maintain your pool yourself. If you live in a climate where you’ll use the pool year-round, budget $15–25 a week for DIY maintenance,” they continue.

If you must install a pool for your own enjoyment, keep in mind that it won’t pay for itself when you sell the home and you’ll likely take a hit on your home’s value.

No, these aren’t the only things that negatively impact a home’s value. Many of the others are out of your control. For those issues that are within your control, act on them.

Speak up and protect your investment when the airport decides to change flight paths, when something negative is about to impact the quality of your local school and when value-killing zoning changes are afoot.