Real Estate and Housing http://www.wisebread.com/taxonomy/term/4810/all en-US How Long Does it Take Break Even With a Home ReFi? http://www.wisebread.com/how-long-does-it-take-break-even-with-a-home-refi <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-long-does-it-take-break-even-with-a-home-refi" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_s_hand_putting_house_model_on_coins_stack.jpg" alt="Woman&#039;s hand putting house model on coins stack" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Refinancing your mortgage loan to one with a lower interest rate makes good financial sense &mdash; usually. It all depends on how much lower your interest rate will be, how much you owe on your loan, and how long you plan to stay in your home.</p> <p>Refinancing a mortgage isn't free. Costs vary by lender, but you can expect to pay from 1.5 percent to 2 percent of your outstanding loan balance to close a refinance. If you owe $200,000 on your mortgage loan, that comes out to $3,000 to $4,000 &mdash; no small amount. But if your monthly mortgage loan drops by enough, you'll recoup those costs quickly. Then, the savings you enjoy each month will start adding up.</p> <p>Determining how long it will take you to break even on your refinance requires a bit of math. Let's crunch the numbers.</p> <h2>Finding the break-even point</h2> <p>Say you have been paying off a $250,000 30-year, fixed-rate mortgage with an interest rate of 4.50 percent. Your monthly mortgage payment &mdash; not including the extra costs of property taxes and homeowners insurance &mdash; will be about $1,266.</p> <p>Now, say when you're ready to refinance, your mortgage balance is down to $200,000. If you refinance that balance to a new 30-year, fixed-rate mortgage with an interest rate of 3.85 percent, your estimated monthly payment, again not including taxes and insurance, will fall to about $937 a month. That's a savings of about $329 a month, or $3,948 a year.</p> <p>If you spent $3,000 in closing costs on your refinance, you'd hit the break-even point on your loan in less than a year.</p> <p>But refinancing doesn't always come with such a quick payback period.</p> <p>For example, if you have been paying off a 30-year, fixed-rate loan of $200,000 at an interest rate of 4.15 percent, your monthly payment, not including taxes and insurance, would be about $972. Say you now owe $190,000 on this loan and you refinance it to a 30-year, fixed-rate loan with an interest rate of 3.85 percent. This will drop your monthly payment to about $890, a difference of $82 a month or about $948 a year.</p> <p>If it costs you $3,000 to refinance that mortgage, it will take you a little more than three years to hit the break-even point. If you plan on living in your home and paying off your new mortgage for more than these three years, this refinance might still make financial sense. The payback period, though, won't be quite as quick.</p> <h2>Speeding up break-even</h2> <p>You can reduce the amount of time it takes you to reach the break-even point in several ways.</p> <p>First, you can shop around for a mortgage lender that charges lower fees. You are free to close your refinance with any lender that is licensed to do business in your state. You don't have to work with the lender to which you are already sending your monthly mortgage payments. Obviously, the lower your upfront costs to refinance, the quicker you'll hit your break-even point.</p> <p>Nabbing the lowest possible interest rate also will help speed up the break-even point. The lower your rate, the lower your monthly payment will be. Getting a lower rate, though, requires a strong credit score.</p> <p>Before applying for a refinance, order free copies of your credit reports from AnnualCreditReport.com. These reports won't give you your credit score, but they will show you whether you have any late or missed payments on your record. Such financial dings will lower your credit score. If you have blemishes on your credit reports, qualifying for an interest rate low enough to make a refinance worthwhile might not be possible.</p> <p>You can also order your FICO score from the three national credit bureaus: TransUnion, Equifax, or Experian. This will usually cost you about $15, but will let you know for sure how high or low your credit score is. If you want to get your score for free, you can call a lender and explain that you want to refinance. This lender will often check your current score, and can let you know immediately whether it is high enough to justify a refinance.</p> <p>Finally, the more you've paid off on your existing mortgage before you refinance, the quicker you'll reach your break-even point. Most lenders won't approve you for a refinance unless you've already built up 20 percent equity in your home. So don't run to refinance just a year after taking out your existing mortgage. Unless your home has shot up in value dramatically, you probably won't have enough equity to qualify for a refinance, or to make it financially worthwhile.</p> <h2>Other factors to consider</h2> <p>Of course, lowering your monthly payment isn't the only reason to refinance. You also want to reduce the amount of interest you pay on your loan.</p> <p>That's why you might consider refinancing from a longer-term loan to one with a shorter term. Doing so will usually increase your monthly payment because you are cutting the number of years it takes you to repay your mortgage. But refinancing from a 30-year, fixed-rate loan to a 15-year, fixed-rate loan could save you plenty in interest.</p> <p>If you take out a 30-year, fixed-rate mortgage of $200,000 at an interest rate of 4.2 percent, you'll pay more than $150,000 in interest if you take the full 30 years to pay off your loan. If you instead take out a 15-year, fixed-rate loan for $200,000 at an interest rate of 3.5 percent, you'll pay less than $60,000 in interest if you take the full term to pay off this loan.</p> <p>The best move to make when considering a refinance is to go over the numbers with a mortgage lender. A lender won't charge you for a preliminary look at your mortgage and credit. But a lender will be able to tell you how long it will take to recover the costs of refinancing and whether you'll qualify for a low enough interest rate to make refinancing a viable choice.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-long-does-it-take-break-even-with-a-home-refi">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-should-consider-an-adjustable-rate-mortgage">Why You Should Consider an Adjustable-Rate Mortgage</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-ends-meet-when-youre-house-poor">How to Make Ends Meet When You&#039;re House Poor</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-safe-to-re-finance-your-home-close-to-retirement">Is it Safe to Re-Finance Your Home Close to Retirement?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-times-buying-a-home-with-cash-is-bad-for-your-budget">5 Times Buying a Home With Cash Is Bad for Your Budget</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stop-believing-these-5-home-refinance-myths">Stop Believing These 5 Home Refinance Myths</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing break-even point home loans homeownership interest rates mortgages payments refinance Tue, 25 Jul 2017 08:30:14 +0000 Dan Rafter 1986882 at http://www.wisebread.com 20+ Questions to Ask During an Open House http://www.wisebread.com/20-questions-to-ask-during-an-open-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/20-questions-to-ask-during-an-open-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/showing_room.jpg" alt="Showing room" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Shopping for real estate can be daunting. It takes time and discernment to know which house is right for you. To avoid wasting time on open house visits, be prepared with these key questions. If you find a house that matches your wish list, chat with the listing agent to find out all the details you don't want to overlook.</p> <h2>Before you start asking questions</h2> <p>First things first: Pick up a copy of the property information. These are often on the kitchen counter or near the entry during open houses. Many people view the house, and then look over the information. But the disclosure statements often reveal things you'll want to see while on site; maybe there was water damage, or the carpets were recently replaced. Spend five minutes reviewing the property information so you can eyeball the improvements or issues as you move from room to room.</p> <p>Some listing agents will wait near the information sheets, ready to talk to prospective buyers. If you're not ready to chat yet, say so; the agent should accommodate your desire to view the house and review the information before either of you starts asking questions.</p> <h2>General questions</h2> <p>Ask these questions to get an idea of the overall condition of the house and area.</p> <h3>What's the reason for the sale?</h3> <p>This may seem like a personal question, but it's a valid one. If the house is being sold because the owners are unhappy with its condition, need for repairs, the safety of the area, or the feel of the neighborhood, you want to know. Your goal is to understand if the reason for the sale is personal or due to an issue with the house or area.</p> <p>Don't press for personal information about the owners, of course; the agent should protect their confidentiality while giving you a top-level answer. If the agent is very hesitant, or unable to provide even a generic or partial answer, note that. If you're interested in the house, you can have your own real estate agent follow up with the listing agent.</p> <h3>What are the biggest problems with the house?</h3> <p>If you ask, &quot;Are there any major problems with the house?&quot; then the agent may say, &quot;No, it's in great shape.&quot; Phrasing matters. Every house has problems. This is the time to find out what those problems are. The listing agent wants to sell the property, of course, but they want the sale to be a satisfactory one.</p> <p>In many states a seller's disclosure is required, and should be included with the property information. You can ask for more details on any issues disclosed:</p> <ul> <li> <p>Have there been any more water problems since the sump pump was replaced?</p> </li> <li> <p>How extensive was the termite damage listed on the disclosure?</p> </li> <li> <p>Have the owners done any further mold testing?</p> </li> </ul> <p>Asking for more information will help you determine if the issues have been resolved or would require additional repair or maintenance.</p> <h3>What are the average utility costs?</h3> <p>Older houses tend to be less energy efficient, and can come with heftier utility bills than you'd expect. On the other hand, the owners may have a installed top-of-the-line HVAC system, put in double-paned windows, and invested in other energy-saving upgrades. The listing agent will know, or be able to find out, the average monthly cost for utilities. It's a good idea to ask for a typical monthly cost in the winter and in the summer, so you can compare how much the energy use might fluctuate seasonally.</p> <h3>Has the price changed at all?</h3> <p>The listing agent will know the history of the house, if the listing price has dropped or increased, and the reasons for any change in price. A lower listing price can be great news for you, but multiple drops in price should be a red flag. Was the house listed much too high for the area? Or are there major issues that are keeping buyers away?</p> <p>In your discussion on price, you can ask other questions to get an idea of the urgency of the sellers:</p> <ul> <li> <p>How long has the house been on the market?</p> </li> <li> <p>Have there been other offers on the house?</p> </li> <li> <p>Are the sellers eager to negotiate?</p> </li> <li> <p>Are the sellers in a hurry to sell?</p> </li> </ul> <p>You may not get direct answers to all these questions, but they're still worth asking. If you are genuinely interested in the property, talking with the agent can give you insight on what matters most to the sellers. If they're in a hurry to move, for example, they might accept a lower offer with a rushed closing date.</p> <h3>Is this a good neighborhood for families?</h3> <p>Maybe you don't have a family; this is still a good question to ask, because &quot;family-friendly&quot; is often code for safe, clean, and welcoming. Are there community events nearby? Is there a neighborhood association? Ask the agent about the nearest places for shopping, entertainment, and dining out. If the nearest grocery store is 10 miles away but the nearest bar is just around the corner, it may not be so family-friendly, after all.</p> <p>A discussion about the neighborhood is a good time to ask about area resources and attractions, as well as cost of living:</p> <ul> <li> <p>Are there any parks or natural attractions nearby?</p> </li> <li> <p>What do people in this area like to do for fun?</p> </li> <li> <p>What's the best restaurant nearby?</p> </li> <li> <p>Do you know what the average income is for this area?</p> </li> <li> <p>Where is the nearest hospital?</p> </li> </ul> <h2>Room by room questions</h2> <p>Some questions are room-specific. Ask the agent to walk through the house with you and discuss as you go.</p> <h3>Kitchen<strong> </strong></h3> <ul> <li> <p>Which appliances are included? How old are they?</p> </li> <li> <p>Have there been any major updates or renovations in the kitchen?</p> </li> <li> <p>Are there any water issues in the kitchen?</p> </li> <li> <p>Have there been any major repairs in the kitchen?</p> </li> </ul> <h3>Basement</h3> <ul> <li> <p>Are there any water issues in the basement?</p> </li> <li> <p>Is there a sump pump installed?</p> </li> <li> <p>Have there been any issues with mold?</p> </li> </ul> <h3>Living rooms and bedrooms</h3> <ul> <li> <p>How old is the carpet?</p> </li> <li> <p>What's underneath the carpet?</p> </li> <li> <p>Have the rooms been recently painted?</p> </li> <li> <p>Are the window treatments included?</p> </li> <li> <p>Have there been any renovations or updates done lately?</p> </li> </ul> <h3>Bathrooms</h3> <ul> <li> <p>Are there any water issues in the bathrooms?</p> </li> <li> <p>How is the water pressure? (Ask if you can check it.)</p> </li> <li> <p>How recently have the bathroom fixtures been updated?</p> </li> </ul> <h3>Yard</h3> <ul> <li> <p>Does the landscaping allow water to flow away from the house?</p> </li> <li> <p>Are there any wet or soggy areas in the yard?</p> </li> <li> <p>Have the owners done regular pest control?</p> </li> <li> <p>Are there any issues with the yard or garden?</p> </li> </ul> <h2>Open house etiquette</h2> <p>Open houses vary, but there are some common etiquette rules to follow. Don't forget to sign in; leave your name only if you prefer not to include your contact information. Be sure to greet the listing agent. Let the agent know you have questions, but don't keep them from being able to interact with other visitors. Discuss, don't dominate.</p> <p>Expect to answer a few questions about yourself, such as &quot;How long have you been looking?&quot; A good listing agent will be trying to determine who's a serious buyer and who's there for the free mints.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F20-questions-to-ask-during-an-open-house&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F20%252B%2520Questions%2520to%2520Ask%2520During%2520an%2520Open%2520House.jpg&amp;description=20%20plus%20Questions%20to%20Ask%20During%20an%20Open%20House"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/20%2B%20Questions%20to%20Ask%20During%20an%20Open%20House.jpg" alt="20+ Questions to Ask During an Open House" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> of <a href="http://www.wisebread.com/20-questions-to-ask-during-an-open-house">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-questions-to-ask-before-signing-a-lease">10 Questions to Ask Before Signing a Lease</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-times-buying-a-home-with-cash-is-bad-for-your-budget">5 Times Buying a Home With Cash Is Bad for Your Budget</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/watch-out-for-these-5-last-minute-home-buying-costs">Watch Out for These 5 Last Minute Home Buying Costs</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-home-buying-habits-we-can-learn-from-millennials">4 Home-Buying Habits We Can Learn From Millennials</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-unexpected-costs-of-selling-a-home">8 Unexpected Costs of Selling a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing damage home buying homeownership listing agents maintenance open houses pests problems questions renovations utilities Thu, 20 Jul 2017 08:30:14 +0000 Annie Mueller 1986643 at http://www.wisebread.com 5 Reasons a Home Sale Could Fall Through http://www.wisebread.com/5-reasons-a-home-sale-could-fall-through <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-a-home-sale-could-fall-through" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/loan_for_house_concept_0.jpg" alt="Loan for house concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's finally happened: You've been trying to sell your home for weeks. An offer comes in and you accept it. You and the buyers sign a contract. You're now on your way to a closed sale, right? Not necessarily.</p> <p>Home sales can fall through, and it's something that's been happening more frequently: Trulia reported that 3.9 percent of home sales fell through last year, up from 2.1 percent a year earlier.</p> <p>Those numbers indicate that most home sales do eventually close after the buyers and sellers agree on a price and sign a contract, but what about the nearly 4 percent that didn't? What kept those sales from closing?</p> <h2>1. The inspection</h2> <p>Most buyers today will order an inspection of a home after they sign a contract and before they sign the closing papers that give them ownership of the residence. The home inspector tours the property, looking for problems big and small. It's the big problems that can scuttle a sale.</p> <p>When inspectors turn up major problems &mdash; such as leaky roofs or sagging foundations &mdash; buyers will ask for relief from sellers. Sellers can agree to hire contractors to fix the problems themselves, reduce the selling price of the home, or provide buyers with a credit so that they can fix the issues.</p> <p>But if sellers refuse to do this, buyers can cancel the home sale. Buyers might lose the earnest money deposit they made when signing their contract, but the home sale will fall through.</p> <h2>2. The appraisal</h2> <p>Most buyers will take out a mortgage loan to buy a home. When they do so, their lender will require them to pay for an appraisal of the residence. Problems arise when the appraisal comes in significantly less than the agreed-upon sales price.</p> <p>Say you and the buyer agree on a final price of $250,000, but the appraisal ordered by the buyer comes in at just $180,000. The odds are high that the buyer's lender won't provide a loan that is so much higher than this appraised value.</p> <p>Sellers could reduce their price. Or buyers could bring enough cash to the table to bridge the difference. But if this doesn't happen, the sale will most likely fall through.</p> <h2>3. The buyer can't get a mortgage</h2> <p>You and a buyer might have agreed on a final price and signed a contract to sell your home. But what if that buyer is rejected for a mortgage loan? When buyers can't qualify for mortgages, home sales are scuttled.</p> <p>That's why it's best to accept offers from buyers who are already preapproved for mortgages. These buyers are more likely to get the financing they need to close a home sale.</p> <h2>4. The buyer gets nervous</h2> <p>Buyers sometimes suffer immediate remorse after signing a contract to purchase a home. Sometimes that remorse passes. Other times, it's so strong that the buyers back out of their purchase.</p> <p>Sellers do have some protection here. If buyers simply change their minds after signing a purchase contract, they will usually lose their earnest money deposit. That deposit &mdash; made when buyers sign a purchase contract &mdash; is typically 1 percent of a home's final sale price. Unless there are extenuating circumstances, such as problems uncovered in the home inspection, sellers will typically keep that money if the buyers walk away from the deal.</p> <h2>5. The buyers can't sell their homes</h2> <p>Buyers often must sell a home before they can officially buy yours. That's because most people can't afford two mortgage payments at once. These buyers will make what are known as contingent offers: Their purchase of a home won't close until they can first sell their own residence.</p> <p>Typically, a contingent offer will give buyers a set number of days to sell their homes, often 30. If buyers can't sell their own homes during this time, their offer to buy your home will fall through.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-reasons-a-home-sale-could-fall-through&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Reasons%2520a%2520Home%2520Sale%2520Could%2520Fall%2520Through.jpg&amp;description=5%20Reasons%20a%20Home%20Sale%20Could%20Fall%20Through"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Reasons%20a%20Home%20Sale%20Could%20Fall%20Through.jpg" alt="5 Reasons a Home Sale Could Fall Through" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-reasons-a-home-sale-could-fall-through">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-buy-a-house-without-a-mortgage">4 Ways to Buy a House Without a Mortgage</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-your-house-is-not-an-investment">Stop Thinking of Your House as an Investment</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-questions-to-ask-before-leaving-your-house-to-your-kids">4 Questions to Ask Before Leaving Your House to Your Kids</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-times-you-need-to-walk-away-from-your-dream-home">8 Times You Need to Walk Away From Your Dream Home</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-signs-a-seller-should-pass-on-a-home-offer">6 Signs a Seller Should Pass on a Home Offer</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing appraisals back out buyers homeownership inspections mortgage preapproval Sale sellers selling a home Wed, 19 Jul 2017 09:00:13 +0000 Dan Rafter 1982852 at http://www.wisebread.com 5 Things to Consider Before Buying a Home When You're Single http://www.wisebread.com/5-things-to-consider-before-buying-a-home-when-youre-single <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-to-consider-before-buying-a-home-when-youre-single" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_with_keys_standing_outside_new_home.jpg" alt="Woman With Keys Standing Outside New Home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's become increasingly common for people to buy a home by themselves instead of as a couple. According to the National Association of Realtors' <em>Profile of Homebuyers and Sellers</em>, new homeowners in 2016 were comprised of 17 percent single females and 7 percent single males.</p> <p>Buying a home is a big undertaking, whether or not you're doing it as a single person. I spoke to Markus Brown, a realtor in Orange County, California, about some things to consider before buying a home by yourself.</p> <h2>1. Understand the risks</h2> <p>As a single person, is it better to pay rent or to own a home? The monthly costs of owning a home may be higher than what you pay in monthly rent when you consider costs like insurance, property tax, maintenance, and higher utility bills. You're also taking on greater risk by taking on a loan. (See also: <a href="http://www.wisebread.com/why-i-choose-to-rent-instead-of-buy?ref=seealso" target="_blank">Why I Choose to Rent Instead of Buy</a>)</p> <p>However, according to Brown, there can be significant advantages to owning a home, the biggest of which is the ability to fix your housing costs in the future. When you own your home on a fixed-rate, 30-year mortgage, you remove unknowns such as your rent going up, being asked to move because the landlord wants to renovate or sell, and more. This allows you to make concrete plans for the future without worrying about housing.</p> <p>If you're planning to stay in the area for several years, you should consider buying a home. &quot;Historically, you need to own for at least five to 10 years before market appreciation helps you to make a profit,&quot; Brown says, &quot;[but] if you're going to be relocated in a year or two, don't buy.&quot;</p> <h2>2. Review your finances</h2> <p>Having only one income to rely on in purchasing a home can stretch you financially, so it's a good idea to go over your finances before considering a home purchase. You'll also want to take steps to <a href="http://www.wisebread.com/5-ways-to-improve-your-credit-score-fast" target="_blank">improve your credit score</a> before buying a home. Consider the stability of your income and whether you have enough savings to see you through if something happens to that source of income.</p> <p>As a single person, you will want to have a large savings buffer, because you won't be able to fall back on another person's income if yours is disrupted. The rule of thumb is that your emergency fund should have at least six months of income &mdash; nine if your income is unpredictable.</p> <h2>3. Calculate the hidden costs</h2> <p>Don't be surprised by the &quot;hidden&quot; costs of owning a home, including the closing costs, property taxes, insurance, possible homeowners association fees, utilities, maintenance, and potential renovations. Factor all these extra costs into your budget before deciding on a home that you can afford. According to Brown, many people think they can buy more than they actually can when all these costs are factored in. (See also: <a href="http://www.wisebread.com/10-hidden-housing-costs-new-homeowners-dont-expect?ref=seealso" target="_blank">10 Hidden Housing Costs New Homeowners Don't Expect</a>)</p> <h2>4. Talk to a mortgage broker</h2> <p>As a single person, it can be more difficult to quality for a loan because you can only count on one income. If it's your first time buying, you may be able to qualify for an FHA loan, which allows you to purchase with a lower down payment (only 3.5 percent down) and lower interest rates, and doesn't require as high of a high credit score.</p> <p>Another option is the HomeReady Mortgage Program through Fannie Mae, which only requires as little as 3 percent down, and allows greater flexibility in qualifying for a loan, including income from co-borrowers, family members who are not on the loan, gifts from family members, and even &quot;boarder&quot; income from a roommate.</p> <p>Talk to a mortgage broker or financial adviser about whether it makes sense for you to pay a lower down payment. You may have to purchase mortgage insurance if you don't put enough money down, so factor those costs into your decision.</p> <p>&quot;Low down-payment loans make sense for people who have a solid job and stable income, but don't have a lot of savings because they've just started out, such as new grads or young couples,&quot; Brown recommends.</p> <h2>5. Choose the right home</h2> <p>In his experience, Brown sees single people going for condos, because the maintenance and chores are simpler and easier to deal with. Brown suggests buying only what you need at the moment and getting a foot in the market, instead of trying to buy a family home when you don't know what you'll need later. Look for a condo in a community that has other working professionals, and allows you to enjoy your single life.</p> <p>However, it's better to buy a two-bedroom rather than a one-bedroom if you can afford it, according to Brown, because it gives you what he calls &quot;future-proofing.&quot; If you lose your job or the economy tanks, you can take on a roommate to help you share the costs. On the other hand, if you get married or have your partner move in, you have enough space for the next step in building your family. Either way, you won't have to sell immediately if something changes in the future.</p> <p>In addition to potential financial benefits, there are a lot of intangible benefits to owning your own home. Pride in your own home, the ability to control things about your living situation that you couldn't control as a renter (such as decorations and renovations), and the feeling of being more settled, are all attractive reasons to buy a home as a single person.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-things-to-consider-before-buying-a-home-when-youre-single&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Things%2520to%2520Consider%2520Before%2520Buying%2520a%2520Home%2520When%2520Youre%2520Single.jpg&amp;description=5%20Things%20to%20Consider%20Before%20Buying%20a%20Home%20When%20Youre%20Single"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Things%20to%20Consider%20Before%20Buying%20a%20Home%20When%20Youre%20Single.jpg" alt="5 Things to Consider Before Buying a Home When You're Single" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/camilla-cheung">Camilla Cheung</a> of <a href="http://www.wisebread.com/5-things-to-consider-before-buying-a-home-when-youre-single">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage">Make These 5 Money Moves Before Applying for a Mortgage</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-equity-in-your-home">How to Build Equity in Your Home</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-times-buying-a-home-with-cash-is-bad-for-your-budget">5 Times Buying a Home With Cash Is Bad for Your Budget</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-a-first-time-home-buyer-needs-to-buy-a-house">Everything a First-Time Home Buyer Needs to Buy a House</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/watch-out-for-these-5-last-minute-home-buying-costs">Watch Out for These 5 Last Minute Home Buying Costs</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a home credit score down payments hidden costs homeownership income mortgages qualifying single Tue, 18 Jul 2017 09:00:09 +0000 Camilla Cheung 1985091 at http://www.wisebread.com How to Turn Your Home Into a Moneymaking Star http://www.wisebread.com/how-to-turn-your-home-into-a-moneymaking-star <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-turn-your-home-into-a-moneymaking-star" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/camera_crew_director_469158247.jpg" alt="Turning their home into a moneymaking star" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>During the Golden Age of Hollywood, film studios used soundstages and sets for their movies. But in recent years, with the rise of high definition screens, film producers aim to make their films more realistic. That means they often turn to real people's homes, rather than creating a set.</p> <p>The immensely popular show <em>House of Cards</em> is one of the most recent and well-known examples. The Underwoods live in a stunning townhome in the heart of the D.C. area. That house is a <a href="http://www.orlandosentinel.com/bal-baltimore-home-used-as-underwood-residence-in-house-of-cards-up-for-auction-20170608-story.html?utm_campaign=trueAnthem%3A+Trending+Contentutm_content=593a0f3304d3010a420f8e1futm_medium=trueAnthemutm_source=facebook" target="_blank">real residence</a>, located in Baltimore.</p> <p>If you're willing to deal with film crews in your home, you can turn your abode into a lucrative source of income. The <a href="http://afrmortgage.com/blog/could-your-home-be-in-movies-how-to-market-your-property-as-a-film-location/#null" target="_blank">going rate</a> for a film is the price of your monthly mortgage payment per day. That means if your mortgage is $1,500 a month, and the film crew needs your home for three days, you'll earn around $4,500.</p> <p>Find out what renting your home out to filmmakers includes and how to get started.</p> <h2>What film producers look for</h2> <p>Filmmakers and commercial producers aren't just looking for mansions or luxury homes; they also need regular, average houses for their productions. They often need homes that reflect the character of the city they're portraying.</p> <p>For example, the home featured in <em>Breaking Bad</em> isn't a sprawling mansion. The film crew searched for a home that reflected the style of Albuquerque, New Mexico and settled on this <a href="https://roadtrippers.com/us/albuquerque-nm/points-of-interest/walter-whites-house" target="_blank">modest, '70s-style ranch</a>. Everyday homes are needed for sitcoms and films all the time.</p> <p>If the film is about the inner city, a Philadelphia row home may be the perfect fit. Or, if the film is a southern gothic, an older, Victorian-style home in Georgia may be just what they need. Homes with unique architectural details or picturesque views tend to get the most traction.</p> <h2>Other perks</h2> <p>Besides a nice check after production is over, there are other perks that come with renting out your home to a film crew.</p> <p>Sometimes, the producers will decide they need to make certain improvements to your home. They may update the appliances, put in French doors, or even replace your countertops with granite. This is done at no charge to you, and you can keep whatever additions they make.</p> <p>If you have to leave your home during filming, the production team will typically pay for you to stay at a hotel. You can get a nice mini-vacation while your home is making money.</p> <h2>Factors to consider</h2> <p>While you can make thousands by renting out your home, make sure you understand what it entails.</p> <p>Depending on the production, you may have to vacate the home during filming, which means there will be dozens of strangers in your home when you aren't. Your home could go through additional wear and tear, as production people build props, set up special effects, or simply trod dirt in and out.</p> <p>Also, make sure you know your area's rules and your neighbors' tolerance level. Your community may not welcome the added traffic, lights, and noise that a film production brings.</p> <p>Finally, know that if your home is in a film or television show that becomes popular, you will have many people stop by to take pictures of your home. You can have unexpected visitors for years after production stops.</p> <h2>How to rent out your home</h2> <p>There are many different ways to find gigs for your home. While locations like Los Angeles and New York City are often the most in-demand (and command the highest rates), film crews nationwide need homes for their shoots. You can list your home in the following ways:</p> <ul> <li>Contact your state's film commission. State film commissions maintain a listing of available homes for film producers.<br /> &nbsp;</li> <li>List your home with <a href="http://www.locationshub.com/" target="_blank">Locations Hub</a>. This is a national database of available homes for productions.</li> </ul> <p>Another option is to consider renting out your home for commercials rather than movies. Local businesses and advertising agencies frequently film their own commercials, and need nearby homes. You can list your home with <a href="http://www.setscouter.com" target="_blank">Set Scouter</a> to get connected with local productions. According to Set Scouter, the average rate for a 12-hour day is $1,500.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-turn-your-home-into-a-moneymaking-star&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Turn%2520Your%2520Home%2520Into%2520a%2520Moneymaking%2520Star.jpg&amp;description=How%20to%20Turn%20Your%20Home%20Into%20a%20Moneymaking%20Star"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Turn%20Your%20Home%20Into%20a%20Moneymaking%20Star.jpg" alt="How to Turn Your Home Into a Moneymaking Star" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="http://www.wisebread.com/how-to-turn-your-home-into-a-moneymaking-star">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-a-home-sale-could-fall-through">5 Reasons a Home Sale Could Fall Through</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-questions-to-ask-during-an-open-house">20+ Questions to Ask During an Open House</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-to-consider-before-buying-a-home-when-youre-single">5 Things to Consider Before Buying a Home When You&#039;re Single</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-your-house-is-not-an-investment">Stop Thinking of Your House as an Investment</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/14-things-youll-hate-about-your-next-house">14 Things You&#039;ll Hate About Your Next House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Extra Income Real Estate and Housing film crews homeownership movies production renting space sets side gigs Tue, 18 Jul 2017 08:30:17 +0000 Kat Tretina 1986107 at http://www.wisebread.com 14 Things You'll Hate About Your Next House http://www.wisebread.com/14-things-youll-hate-about-your-next-house <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/14-things-youll-hate-about-your-next-house" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/exhausted_man_resting_after_hard_painting_work.jpg" alt="Exhausted man resting after hard painting work" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you go house hunting, it's easy to spot features that you know you'll like in a future home. On the other hand, there are also some features of a home or neighborhood that while not ideal, seem &quot;acceptable&quot; during the house hunt. You might not want to compromise, however: These 14 things can be being downright intolerable after you move in.</p> <h2>1. T-intersection</h2> <p>If your new house is across from a T-intersection, you will get headlights shining in your windows at all hours of the night. Since most people check out houses during the day, this annoying &quot;feature&quot; is easy to miss.</p> <h2>2. Mailbox across the street</h2> <p>I always feel sorry watching people waiting to cross the street to get to their mailbox from their driveway. This seemingly minor nuisance becomes increasingly irritating when you have to do it every day. Having the mailbox on the same side of the street as your house is much handier.</p> <h2>3. Long commute</h2> <p>Before you move, you might think a little extra driving will be worth it for the right house. Within a few weeks, however, those few extra minutes behind the wheel each day add up to hours of extra driving and wear and tear on your vehicle.</p> <h2>4. Empty lot</h2> <p>When you are looking for your next house, you might see an empty lot across the street as a nice feature &mdash; quiet green space with no extra neighbors. After you move, you may find that the neighborhood kids all hang out in the empty lot. You should also worry about what might get built there right across from you when someone buys it.</p> <h2>5. Fixer-upper</h2> <p>Home improvement projects may sound fun when you are looking at houses, but renovations can become burdensome, taking up most of your free time and money. It is easy to underestimate the scope of improvements when you are deciding to buy a house.</p> <h2>6. Heavy traffic nearby</h2> <p>Even if the traffic in your neighborhood is not bad, busy roads nearby can make it a nightmare to get home from work or to run to the store to pick up a few things at dinner time.</p> <h2>7. Rundown neighborhood</h2> <p>You can find a bargain house and fix it up, but there's not much you can do about the neighborhood. A neighborhood in decline can limit resale potential and make living there less enjoyable.</p> <h2>8. Gravel</h2> <p>If your next house has a gravel driveway &mdash; or even worse, is on a gravel road &mdash; your car will always be dirty, and the kicked up debris can cause chips in the paint. Even the grass in your yard will be dusty, and you will stir up a cloud of dust when you mow.</p> <h2>9. Limited southern exposure</h2> <p>You may be too busy to notice which way the windows face when looking at houses, but you will notice when winter comes around. The sun stays low in the sky during winter months and will shine in south-facing windows all day long, providing passive solar heating and welcome wintertime light.</p> <h2>10. Close neighbors</h2> <p>You will probably go house hunting during the working day when almost no one is home, so seeing lots of other houses nearby may not bother you. But after you move in, you realize that everyone is around during evenings and on weekends. You may not feel comfortable going out on your deck or doing something in your yard when multitudes of neighbors are out and about only a few feet away.</p> <h2>11. Streetlights</h2> <p>If you live under a streetlight, you won't have much of a view of the stars. The streetlight might also shine right in your windows at night, forcing you to keep the curtains drawn and reducing the fresh air coming in your windows.</p> <h2>12. Neighborhood construction</h2> <p>If you move to a neighborhood where there is a lot of new construction going up, you will have noise and heavy truck traffic around you as new houses are built. Construction in a new neighborhood can go on for years.</p> <h2>13. Lackluster school district</h2> <p>If you don't have kids, you may not be concerned about the quality of the school district as you look for a house. But you may have kids someday, or you may have trouble selling your house when the time comes since a quality school district is a priority for many homebuyers.</p> <h2>14. High property taxes</h2> <p>When you are looking at big numbers for house prices, the much smaller number you see for property taxes can seem like a minor detail that doesn't matter much. But if you pick a place with high property taxes, you'll be paying more every month. This can add up to thousands of dollars every year.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F14-things-youll-hate-about-your-next-house&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F14%2520Things%2520Youll%2520Hate%2520About%2520Your%2520Next%2520House.jpg&amp;description=14%20Things%20Youll%20Hate%20About%20Your%20Next%20House"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/14%20Things%20Youll%20Hate%20About%20Your%20Next%20House.jpg" alt="14 Things You'll Hate About Your Next House" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/14-things-youll-hate-about-your-next-house">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-house-hunting-red-flags-you-cant-ignore">12 House-Hunting Red Flags You Can&#039;t Ignore</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-a-home-sale-could-fall-through">5 Reasons a Home Sale Could Fall Through</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-questions-to-ask-during-an-open-house">20+ Questions to Ask During an Open House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-to-consider-before-buying-a-home-when-youre-single">5 Things to Consider Before Buying a Home When You&#039;re Single</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/these-are-the-7-features-home-buyers-want-most">These Are the 7 Features Home Buyers Want Most</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing annoying features fixer upper homeownership house hunting neighborhoods quirks resale value school districts Tue, 11 Jul 2017 08:00:10 +0000 Dr Penny Pincher 1977388 at http://www.wisebread.com Why I Choose to Rent Instead of Buy http://www.wisebread.com/why-i-choose-to-rent-instead-of-buy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-i-choose-to-rent-instead-of-buy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/new_beginnings.jpg" alt="New beginnings" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Conventional wisdom says that buying a home is a smarter financial decision that renting. However, homeownership is a huge decision, and it can be an expensive option. Owning a home is not for everyone, and for some, renting can actually be the more cost-effective choice.</p> <p>That's certainly the case for me. Despite earning a good income, my husband and I have decided to rent for the foreseeable future. Here's why it makes sense for us.</p> <h2>1. Affordable housing is hard to find</h2> <p>We live in one of the most highly-desired towns in the Central Florida region. A single-family, 1,200 square foot home in our neighborhood starts at $350,000. Even if you do find a home at that price, they often need significant improvements to be livable. Typically, houses in that price range need new roofs or foundation work.</p> <p>If we put 20 percent down on a home &mdash; a whopping $70,000 &mdash; our monthly payment for the mortgage, insurance, and taxes would be about $1,600 a month. Besides coming up with a huge down payment, that's a high monthly bill.</p> <p>While the housing market is extremely competitive in our neighborhood, rentals are much more affordable. We rent a large two-bedroom apartment with granite countertops, stainless steel appliances, hardwood floors, and resort-like amenities for just $1,300. And we didn't have to come up with a large payment to move in.</p> <p>The lack of affordable housing is a nationwide issue. Particularly in areas like New York City or San Francisco, buying a home can be out of reach for most Americans. In those cases, it can make more sense to rent than buy.</p> <h2>2. Maintenance isn't my problem</h2> <p>If we were to buy that $350,000 home, the down payment and monthly mortgage payment would be only a small portion of our home expenses. We'd have to budget to prepare for other expenses, like emergencies. If the roof needs repairs, or if the appliances break, we'd have to cover the cost of the replacement.</p> <p>With renting, all I need to do if there's a problem is call my landlord. Within 24 hours, they'll have the problem fixed. Not having to worry about the extra cost is helpful and gives me peace of mind. (See also: <a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home?ref=seealso" target="_blank">What It Really Costs to Own a Home</a>)</p> <h2>3. Homes are not an investment</h2> <p>Houses are often touted as a good investment. However, the recession of 2008 showed how flawed that idea was. There's no guarantee that a home's value will increase over time, and there is a chance it could decrease.</p> <p>The homes that go for $350,000 in our area sold for $500,000 pre-recession. But in 2008&ndash;2010, those same homes plummeted to under $180,000. For homeowners who took the plunge to buy, they lost a lot of money and either saw their bank foreclose on their homes or are still underwater.</p> <p>To me, homes are a place to live, not an investment. My goal is to have a safe place to live, not to earn money. (See also: <a href="http://www.wisebread.com/heres-why-your-house-is-not-an-investment?ref=seealso" target="_blank">Stop Thinking of Your House as an Investment</a>)</p> <h2>4. Flexibility is key</h2> <p>Homeownership scares me because it feels permanent. Of course, you could sell the home if you need to move, but that process can be long and complex. And you can end up losing money on the deal.</p> <p>Renting gives me more flexibility. If an opportunity pops up on the other side of the country, I just have to pay to break my lease and am free to leave. Having that option is reassuring in a sometimes tough job market.</p> <h2>5. We have other priorities</h2> <p>If homeownership is your goal, you may have to sacrifice other things to make it possible. To save for a down payment, you may have to cancel your retirement contributions, or take money out of your emergency fund.</p> <p>Contributing the maximum to my 401(k) and building my emergency fund are important to me. Because buying a home would mean postponing those goals, home searching just isn't in the cards.</p> <h2>Buying a home</h2> <p>Whether or not to buy a home is a very personal decision. While many say that homeownership is essential for financial security, it's not the only option available to you. Depending on your circumstances, renting can give you more disposable income each month and more freedom to pursue your other goals.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhy-i-choose-to-rent-instead-of-buy&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhy%2520I%2520Choose%2520to%2520Rent%2520Instead%2520of%2520Buy.jpg&amp;description=Why%20I%20Choose%20to%20Rent%20Instead%20of%20Buy"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Why%20I%20Choose%20to%20Rent%20Instead%20of%20Buy.jpg" alt="Why I Choose to Rent Instead of Buy" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="http://www.wisebread.com/why-i-choose-to-rent-instead-of-buy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-questions-to-ask-before-signing-a-lease">10 Questions to Ask Before Signing a Lease</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-your-house-is-not-an-investment">Stop Thinking of Your House as an Investment</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-how-much-rent-you-can-really-afford">The Simple Way to Decide How Much Rent You Can Really Afford</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-questions-landlords-cant-ask">10 Questions Landlords Can&#039;t Ask</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-apartment-hunt-on-craigslist-without-getting-scammed">6 Ways to Apartment Hunt on Craigslist Without Getting Scammed</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing affordable housing apartments buying a home flexibility housing markets maintenance mortgage renting Mon, 10 Jul 2017 08:00:08 +0000 Kat Tretina 1977387 at http://www.wisebread.com Stop Believing These 5 Home Refinance Myths http://www.wisebread.com/stop-believing-these-5-home-refinance-myths <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/stop-believing-these-5-home-refinance-myths" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/color_question_mark_in_drawing_house.jpg" alt="Color question mark in drawing house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You might think, because of rising interest rates, that it no longer makes sense to refinance your home mortgage. Or maybe you are certain you don't have enough equity in your home. Perhaps you don't think you have enough available cash to afford a refinance, so what is the point of trying?</p> <p>Here's the truth: Those are all refinancing myths.</p> <p>Don't let these common falsehoods stop you from trying to refinance your existing mortgage into one with a lower interest rate or a shorter term. Refinancing can boost your financial health, either by lowering your monthly payment or reducing the amount of interest you'll pay during the life of your loan.</p> <h2>1. I don't have enough equity in my home</h2> <p>Traditionally, mortgage lenders have required that homeowners have at least 20 percent equity in their residences before refinancing. It might not be easy to hit that mark if your home has lost value since you purchased it.</p> <p>But the 20 percent rule isn't quite as absolute as it once was. The federal government's <a href="https://www.harp.gov/" target="_blank">Home Affordable Refinance Program</a>, better known as HARP, allows homeowners to refinance even if they have no equity or negative equity in their homes. You will have to meet certain requirements, but if you are low on equity, HARP can help.</p> <p>To participate in HARP, ask the lender that is handling your refinance. This lender will help you determine if you qualify for the program.</p> <h2>2. I can't afford it</h2> <p>No one disputes that refinancing is expensive. Lenders vary, but you can expect to pay about 1.5 percent of your loan's outstanding value in closing costs. If you are refinancing a loan with a balance of $200,000, you'll pay about $3,000 in fees.</p> <p>Don't panic, though: Most lenders will allow you to roll these fees into the balance of your new loan. This means you won't have to pay them upfront when you close on your refinance. Instead, they'll be paid out over time, every time you make a monthly payment on your new mortgage.</p> <p>Of course, if you can afford the costs of refinancing, you can also pay the closing fees upfront in one lump sum.</p> <h2>3. I was turned down before, so there's no reason to try again</h2> <p>Maybe you tried refinancing a year ago, but your lender rejected your application. This doesn't mean that you can't ever qualify. The reason for your rejection is key.</p> <p>Did your lender reject your application because your credit score was too low? If you start a new history of paying all your bills on time and <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=internal" target="_blank">cutting down on credit card debt</a>, your score might be high enough today to secure a &quot;yes&quot; from a lender. Maybe your lender rejected you because your monthly debt obligations were too high for your gross monthly income. If your income has risen or you've reduced your monthly debts, you might qualify if you try again. (See also: <a href="http://www.wisebread.com/5-ways-to-improve-your-credit-score-fast?ref=seealso" target="_blank">5 Ways to Improve Your Credit Score Fast</a>)</p> <h2>4. It's easier to refinance with your existing lender</h2> <p>You are free to refinance with any mortgage lender that is licensed to do business in your community. This means that you don't have to close your refinance with the lender to which you are already sending your monthly payments. You might think it's easier to work with your existing lender, but this isn't really true. You'll still have to send paperwork to your current lender verifying your job status, salary, and yearly income. This information, after all, might have changed since you first took out your mortgage. Your current lender will want to verify that your income is still high enough to afford your new monthly mortgage payments.</p> <p>Also, it makes sense to get quotes from several lenders when refinancing. You might nab a lower interest rate or fees from a new lender.</p> <h2>5. Interest rates are too high to make refinancing worthwhile</h2> <p>Mortgage interest rates are still at historic lows, but they have risen in the last year. You might think that it no longer makes sense to refinance. That's not necessarily true.</p> <p>It all depends on where your current interest rate stands. If the interest rate on your 30-year, fixed-rate loan is 5 percent and you can refinance to a new loan with a rate of 4 percent, you will save money each month. Sure, you would have saved even more had you refinanced earlier, when you might have nabbed an interest rate of 3.5 percent. But if you can still drop your rate by a full percentage point, you will still save a significant amount of money in a refinance.</p> <p>There are also other reasons to refinance besides chopping your monthly payment. You might consider refinancing to a mortgage with a shorter term. By refinancing from, say, a 30-year, fixed-rate loan to a 15-year, fixed-rate loan, you can reduce the amount of interest you pay over the life of your loan by $100,000 or more, if you hold onto your loan for its entire term. Your monthly mortgage payment will go up because you are paying your loan back at a faster rate, but your interest rate, and the interest you pay in total, will fall.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fstop-believing-these-5-home-refinance-myths&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FStop%2520Believing%2520These%25205%2520Home%2520Refinance%2520Myths.jpg&amp;description=Stop%20Believing%20These%205%20Home%20Refinance%20Myths"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Stop%20Believing%20These%205%20Home%20Refinance%20Myths.jpg" alt="Stop Believing These 5 Home Refinance Myths" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/stop-believing-these-5-home-refinance-myths">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-equity-in-your-home">How to Build Equity in Your Home</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-mortgage-secrets-only-your-broker-knows">4 Mortgage Secrets Only Your Broker Knows</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-secrets-to-refinancing-an-underwater-mortgage">7 Secrets to Refinancing an Underwater Mortgage</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-ends-meet-when-youre-house-poor">How to Make Ends Meet When You&#039;re House Poor</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing equity fees HARP interest rates lenders mortgages myths refinance turned down Fri, 07 Jul 2017 08:01:04 +0000 Dan Rafter 1976047 at http://www.wisebread.com Stop Thinking of Your House as an Investment http://www.wisebread.com/heres-why-your-house-is-not-an-investment <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-why-your-house-is-not-an-investment" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/saving_to_buy_a_house_or_home_savings_concept.jpg" alt="Saving to buy a house or home savings concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Your house is many things: It's a place to raise your children, hold family parties, relax on weekends and, maybe, rent out for a bit of extra cash.</p> <p>But here's one thing that many economists believe it is not: an investment.</p> <p>That flies in the face of what you might believe. After all, if you buy your home for $200,000 and then sell it 15 years later for $270,000, you've made $70,000, right? That sounds like a good return on investment, but it's actually not.</p> <p>That profit doesn't include all the property taxes you've paid on your home, the interest you've paid on your mortgage loan, or all the money you've spent on maintaining your residence.</p> <p>The fact is, the only time a home might truly be a good investment is when you're downsizing or moving to an apartment after selling it.</p> <h2>Sobering numbers</h2> <p>In a 2014 interview with USA Today, economist and housing expert Robert Shiller explained why consumers should not think of housing as an investment.</p> <p>From 1890 through 2012, <a href="https://www.usatoday.com/story/money/personalfinance/2014/05/10/why-your-home-is-not-a-good-investment/8900911/" target="_blank">home prices adjusted for inflation</a> did not grow at all, according to Shiller's research. During the same period, though, stocks did. Shiller found that the S&amp;P 500 increased by more than 2,000 times during those same years, adjusted for inflation.</p> <p>Shiller found that there have been long periods of time in which housing values when adjusted for inflation fell. He said that from 1890 through 1980, real home prices dropped by about 10 percent.</p> <p>Personal financial blog Observations also looked at inflation-adjusted housing prices from 1900 through 2012. According to these numbers, the average annual price for U.S. homes was just <a href="http://observationsandnotes.blogspot.com/2011/07/housing-prices-inflation-since-1900.html" target="_blank">0.1 percent a year</a> after inflation.</p> <p>These numbers make it clear: You should buy a house because it's a house, you need a place to live, and you don't want to rent. You shouldn't buy a house thinking that you're making a great financial investment. (See also: <a href="http://www.wisebread.com/rent-your-home-or-buy-heres-how-to-decide?ref=seealso" target="_blank">Rent or Buy a Home? Here's How to Decide</a>)</p> <h2>It's not easy to get your cash from an investment in housing</h2> <p>There are other aspects of houses that make them less-than-ideal as investments. The biggest? It's not easy to turn your home into cash.</p> <p>Sure, your home might have risen in value during the 10 years you've owned it. (Even if, as shown above, when adjusted for inflation, that appreciation might be negligible.) But accessing this appreciation isn't easy. You'll have to sell your home to get at whatever money it's made.</p> <p>Selling a home is no simple task. It's time-consuming. It's expensive, too, as you'll probably invest in everything from fresh coats of paint to major appliance repairs before you put your home on the market. And what if you don't want to sell your home? Then you won't be able to nab that cash.</p> <p>You can take out home equity lines of credit or home equity loans to tap the equity in your home. But you'll have to pay back the money you borrow, with interest, each month. If your home should lose value after you take out our home equity loan, you could end up underwater, owing more on your combined mortgage loans than what your home is worth.</p> <h2>If it's an investment, it's an expensive one</h2> <p>It's expensive to own a home. And that, too, makes housing a less attractive investment.</p> <p>Consider homeowners insurance. If you are using a mortgage loan to finance your house, you're required to invest in this insurance. Even if you're not financing your home, you should take out a policy to protect yourself. Realtor.com estimates that the average homeowners insurance premium across the country is $952.</p> <p>Then there are property taxes. The U.S. Census Bureau said that in 2017 the average household was spending $2,149 in property taxes.</p> <p>Finally, there is maintenance. This will vary, of course, but Realtor.com says that you can expect to pay from 1 percent to 4 percent of your home's value in maintenance each year. If your home is worth $200,000, that comes to between $2,000 and $8,000 a year.</p> <p>If you do sell your home for a profit, you need to factor in these costs of ownership when patting yourself on the back for making such a wise investment.</p> <h2>Housing's not bad, though</h2> <p>This doesn't mean that buying a house is a bad financial move. You do have to live somewhere, and depending on where you live, it might be less expensive to own a home than it is to rent an apartment.</p> <p>Owning a home also gives you some financial flexibility. You can rent out a portion of your home, for instance, to earn additional cash. You'll also be able to claim tax write-offs for the interest you pay on your mortgage loan each year and the property taxes you pay.</p> <p>Housing does provide this other benefits, too: shelter for your family, a gathering place for relatives and friends, and a respite at the end of a tough day.</p> <p>It's important to be realistic about housing's investment potential. If you want to invest, buying stocks or investing in mutual funds might be a better choice. Even low-interest, but safe investments such as bonds or CDs make more sense as an investment.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fheres-why-your-house-is-not-an-investment&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FStop%2520Thinking%2520of%2520Your%2520House%2520as%2520an%2520Investment.jpg&amp;description=Stop%20Thinking%20of%20Your%20House%20as%20an%20Investment"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Stop%20Thinking%20of%20Your%20House%20as%20an%20Investment.jpg" alt="Stop Thinking of Your House as an Investment" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/heres-why-your-house-is-not-an-investment">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-home-buying-habits-we-can-learn-from-millennials">4 Home-Buying Habits We Can Learn From Millennials</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/rent-your-home-or-buy-heres-how-to-decide">Rent Your Home or Buy? Here&#039;s How to Decide</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/yes-you-need-home-title-insurance-heres-why">Yes, You Need Home Title Insurance — Here&#039;s Why</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-questions-to-ask-before-selling-your-house">6 Questions to Ask Before Selling Your House</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Real Estate and Housing homeownership housing market maintenance mortgages property taxes renting return on investment selling a home Thu, 06 Jul 2017 08:30:16 +0000 Dan Rafter 1976048 at http://www.wisebread.com 4 Paint Colors That Can Boost Your Home's Value http://www.wisebread.com/4-paint-colors-that-can-boost-your-homes-value <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-paint-colors-that-can-boost-your-homes-value" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/blue_paint_portrait.jpg" alt="Blue paint portrait" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you want to sell your home, the right paint color can make a huge difference. No matter what Pantone's color of the year might be, a recent report found that certain colors boost a home's value. Blues and neutrals, in particular, can increase the amount you're able to get for your home.</p> <p>Zillow, the home-listing app of choice for thousands of people who want to sell or buy a home, recently released its 2017 <a href="http://zillow.mediaroom.com/2017-06-01-Homes-with-Blue-Bathrooms-Sell-for-5-400-More-than-Expected" target="_blank">analysis of paint colors and home values</a>. It's pretty interesting. Turns out that the right paint color in the right room can boost the selling price by several thousand dollars. (See also: <a href="http://www.wisebread.com/6-questions-to-ask-before-selling-your-house?ref=seealso" target="_blank">6 Questions to Ask Before Selling Your House</a>)</p> <h2>Greige</h2> <p>You and I and every homeowner out there may have long grown tired of that grayish beige, the go-to neutral for the modern home. But homebuyers aren't tired of it. Zillow reports that as an exterior house color, a lovely shade of greige can boost the sale price by more than $3,000.</p> <p>It's not just about the neutral, though; it's this particular neutral that makes buyers go batty, apparently. Homes with dark brown or taupe exteriors sold for less than their greige counterparts. All neutrals are not created equal when it comes to home sales. Taupe is out. Greige is in.</p> <h2>Navy blue</h2> <p>Navy blue is a perennial in home decor, a classic color that can work with a multitude of design styles. Perhaps its depth renders a solid, enduring feel to a home. Perhaps it's just everybody's secret favorite color. Either way, it turns out a front door painted in navy blue can garner an additional $1,500 in the home sale. Considering that you can paint a door for around $20, this is an update well worth the investment.</p> <p>Navy blue can serve you well in other areas of the home, too. Dining rooms painted navy and sporting white trim can bring almost $2,000 more to the selling price. Go ahead and buy a gallon of interior paint in navy when you pick up that quart of exterior paint for the front door. (See also: <a href="http://www.wisebread.com/beginners-guide-to-finding-your-interior-design-style?ref=seealso" target="_blank">Beginner's Guide to Finding Your Interior Design Style</a>)</p> <h2>Other blues</h2> <p>Here is a short list of interior colors that homebuyers <em>do not like</em>: pink, red, and yellow. Why so much hate for these warm colors? There's plenty of room for speculation (a psychological hive-mind? An innate response to global warming?). Motivations are mysterious; money is easier to count. A pink bedroom will reduce selling price by $200 in some areas, and a red dining room will bring the price down by $2,000. So apparently people literally see red when they see red.</p> <p>Here's a short list of interior colors that homebuyers really do like: blue. Make your world a blue world. Bedroom? Paint in light cerulean for potential $1,800 increase. Bathrooms in light powder blue or periwinkle are very popular, and those home prices got a boost of about $5,000. Kitchens are popular in light blue or soft grayish blue tones, and can add almost $2,000 to your home's value.</p> <h2>Oatmeal</h2> <p>There's one exception to the blue rule, and that's the living room. A living room in blue can reduce a home's value by $800. A living room painted in a light taupe or beige, however, can increase by $1,800.</p> <p>And white is a major negative when it's in the bathroom. Homes with white bathrooms saw a decrease in value of around $4,000. Buyers seem to place a very high value on the bathroom being the right color. Keep your bathrooms blue and your living rooms the color of oatmeal, and everybody's happy.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-paint-colors-that-can-boost-your-homes-value&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Paint%2520Colors%2520That%2520Can%2520Boost%2520Your%2520Homes%2520Value.jpg&amp;description=4%20Paint%20Colors%20That%20Can%20Boost%20Your%20Homes%20Value"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Paint%20Colors%20That%20Can%20Boost%20Your%20Homes%20Value.jpg" alt="4 Paint Colors That Can Boost Your Home's Value" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> of <a href="http://www.wisebread.com/4-paint-colors-that-can-boost-your-homes-value">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-problems-you-can-solve-with-duct-tape">13 Problems You Can Solve With Duct Tape</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/40-ways-to-use-spray-paint-for-cheap-and-easy-decorating">40 Ways to Use Spray Paint for Cheap and Easy Decorating</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-create-your-dream-backyard-on-a-budget">How to Create Your Dream Backyard on a Budget</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ideas-for-cheap-festive-fall-decor">12 Ideas for Cheap, Festive, Fall Decor</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/recoup-more-of-your-investment-8-home-improvements-that-add-the-most-value">Recoup More of Your Investment: 8 Home Improvements That Add the Most Value</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Home Real Estate and Housing decor DIY home projects home value paint paint color paint project painting selling your home Mon, 03 Jul 2017 08:30:15 +0000 Annie Mueller 1975526 at http://www.wisebread.com 6 Signs a Seller Should Pass on a Home Offer http://www.wisebread.com/6-signs-a-seller-should-pass-on-a-home-offer <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-signs-a-seller-should-pass-on-a-home-offer" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/loan_for_house_concept.jpg" alt="Loan for house concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's no way to predict how long it'll take to sell a house. I'm in the process right now, and it's excruciating. When you get an offer from a buyer, your first inclination may be to seize it. The sooner you accept an offer, the sooner you can move into a new place, right?</p> <p>But not every offer is a good offer &mdash; and if you accept the wrong one, the deal could collapse (which has happened plenty of times in my amateur real estate dealings). Learning how to recognize the red flags of an iffy buyer is the best way to protect yourself.</p> <p>Here are six warning signs to consider before accepting an offer on your house.</p> <h2>1. Buyer isn't preapproved</h2> <p>There's no rule that says a buyer must be preapproved before submitting a bid. But when a person has taken steps to secure a mortgage loan, you know you're dealing with a serious buyer.</p> <p>On the other hand, if you receive an offer from a buyer who hasn't met with a lender, you don't know if they meet the requirements for a mortgage. If you accept this offer only to learn that they can't get financing, you're back to square one.</p> <h2>2. Buyer is inflexible</h2> <p>Be wary of buyers who have nonnegotiable time constraints for closing and moving into the home. A buyer may want a quick close, which isn't a bad thing if you already have another place. But if it doesn't complement your own timeline, you could end up living with family, or worse, in a hotel, which chips away at money that could go toward your new home.</p> <p>Then again, a buyer may not want to take possession of the house for 60 or 90 days. This can delay closing on your next property, and if you've already signed a purchase agreement for another property, you could end up juggling two mortgages for a couple of months. Ideally, you should work with a buyer who's able to close and take possession of the house around the same time you're scheduled to close on your new property.</p> <h2>3. Buyer's offer is contingent on selling their house</h2> <p>If a buyer has yet to sell their current house, they may submit a purchase agreement that's contingent on the sale of their home. Accepting this offer is tempting, especially if your property hasn't had a lot of interest. But it's a risky move.</p> <p>You don't know if or when the buyer's home will sell. If the buyer's property doesn't sell within the agreed upon time frame, you'll have to cancel the purchase agreement. This wastes time and you could potentially miss out on other offers.</p> <h2>4. Buyer offers an amount above list price</h2> <p>A buyer who has a strong interest in your property might submit an offer above your list price. This is good news for your wallet, but you could run into appraisal problems if the offered price is more than your home's value.</p> <p>As a rule of thumb, a bank will only lend up to a home's appraised value. If your list price is $200,000 and your home's worth $205,000, yet you receive an offer for $210,000, the buyer's mortgage lender will not approve financing unless the buyer pays the difference between the sale price and appraised value out-of-pocket.</p> <p>An appraisal issue isn't the end of the world, but it's a hassle because you have to renegotiate the sale price. To avoid this hang-up, know your home's market value and select offers within this range.</p> <h2>5. You receive an offer from a cash buyer</h2> <p>A cash buyer can be a home seller's dream. You don't have to worry about the buyer qualifying for financing, appraisals, and many cash deals close relatively quickly. But if you receive an offer from a cash buyer, don't take their word for it. Ask for proof of funds before accepting the offer, such as a bank statement or other documentation. The last thing you want to do is take your house off the market, and then find out a so-called cash buyer doesn't have enough funds to complete the purchase.</p> <h2>6. Buyer requests too many concessions</h2> <p>Some homebuyers are bold and ask for concession after concession. This is typical if your home has been on the market for a while and buyers smell your desperation. They may submit an offer well below your asking price, ask for seller-paid closing costs, request appliances like the washer and dryer, and some go as far as requesting repairs in their purchase agreement.</p> <p>It's tempting to give in to these requests, but at the same time, don't get in over your head financially. Keep in mind that the buyer will likely also request a home inspection, which could uncover costly hidden problems with the home. If you agree to drop your sale price, pay a buyer's closing costs, and take care of their requested home repairs, this can leave you with little money to address any issues found by a home inspector. If you don't correct issues on the home inspection report, the buyer could pull out of the deal.</p> <p>When reviewing your purchase agreement, be realistic and don't feel you have to submit to a buyer's every wish.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-signs-a-seller-should-pass-on-a-home-offer&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Signs%2520a%2520Seller%2520Should%2520Pass%2520on%2520a%2520Home%2520Offer.jpg&amp;description=6%20Signs%20a%20Seller%20Should%20Pass%20on%20a%20Home%20Offer"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Signs%20a%20Seller%20Should%20Pass%20on%20a%20Home%20Offer.jpg" alt="6 Signs a Seller Should Pass on a Home Offer" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/6-signs-a-seller-should-pass-on-a-home-offer">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-times-buying-a-home-with-cash-is-bad-for-your-budget">5 Times Buying a Home With Cash Is Bad for Your Budget</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-a-home-sale-could-fall-through">5 Reasons a Home Sale Could Fall Through</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-to-consider-before-buying-a-home-when-youre-single">5 Things to Consider Before Buying a Home When You&#039;re Single</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-questions-to-ask-before-selling-your-house">6 Questions to Ask Before Selling Your House</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/yes-you-need-home-title-insurance-heres-why">Yes, You Need Home Title Insurance — Here&#039;s Why</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buyers concessions contingencies homeownership mortgages paying cash pre-approvals selling a house Thu, 29 Jun 2017 08:30:15 +0000 Mikey Rox 1969760 at http://www.wisebread.com 4 Home-Buying Habits We Can Learn From Millennials http://www.wisebread.com/4-home-buying-habits-we-can-learn-from-millennials <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-home-buying-habits-we-can-learn-from-millennials" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/new_home_owners_with_key.jpg" alt="New homeowners with key" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Millennials entered the housing market later than their baby boomer and Generation X predecessors. They chose to rent for longer, and are just now starting to flood the housing market.</p> <p>But just because millennials have been slow to embrace homeownership doesn't mean that they don't have anything to teach others about buying a home. In fact, despite their late jump into the housing market, millennials have demonstrated plenty of smart home-buying behaviors. Here are a few smart homeownership habits we can all learn from this younger generation.</p> <h2>Don't rush</h2> <p>Ellie Mae, a software company that works with mortgage data, says that millennials &mdash; young adults from the ages of 18 to 34 &mdash; are currently the largest group of homebuyers in the housing market. According to the company, in January of 2017, these young buyers took out about 45 percent of all the mortgage loans used to buy homes. But homebuying is a recent trend for this age group.</p> <p>Economists have long observed that millennials waited longer than older generations to jump into the housing market, just as they have also waited longer to get married and have families.</p> <p>This isn't necessarily a bad thing. Buying a home is expensive. You'll need money for a down payment and the closing costs on your mortgage loan. This will run you thousands of dollars.</p> <p>As millennials show, there's nothing wrong with waiting until you have a more established job and reliable income to buy a home. Having that economic stability will eliminate some of the stress of covering that mortgage payment each month.</p> <h2>Don't break your budget</h2> <p>You don't want to <a href="http://www.wisebread.com/how-to-make-ends-meet-when-youre-house-poor?ref=internal" target="_blank">overspend on a home</a>. And today, that's getting easier to do because housing prices continue to rise. The National Association of Realtors says that the median price for a home sold in March of 2017 hit $236,400. That's an increase of 6.8 percent from March of 2016, when the median price was $221,400. This March also marked the 61st consecutive month in which home prices rose on a year-over-year basis.</p> <p>One of the most often-cited reasons for millennials' slow entry into the housing market is the student loan debt they face. According to Student Loan Hero, the average college graduate of the class of 2016 has $37,172 in student loan debt, up 6 percent from the previous year. Taking on the added debt burden of a mortgage can be intimidating when you already owe tens of thousands of dollars in student loans.</p> <p>Millennials know about debt. It's why so many of them are cautious about overspending. And this wariness is a good habit to acquire. Just because a mortgage lender approves you for a mortgage loan of $250,000, doesn't mean you must buy a home costing that much. It's OK &mdash; and is, in fact, fiscally smart &mdash; to buy a home that costs less. This will leave you with money leftover and an easier time making those housing payments each month.</p> <h2>Be realistic about the American dream</h2> <p>Buying a home has long been a part of the American dream. But millennials understand that this American dream can easily turn into a nightmare.</p> <p>Many millennials saw their parents lose their jobs and struggle to make their mortgage payments during the Great Recession. Some saw their parents lose their homes to foreclosure. Others watched as their parents' homes steadily lost value, leaving them underwater &mdash; owing more on their mortgage loans than what their homes were worth.</p> <p>Millennials learned that buying a home wasn't the only way to be happy in America. They learned that it could, in fact, be one way to be unhappy in America.</p> <p>The good habit here is that you should never jump into owning a home just because everyone else seems to be doing it. Owning a home isn't the right choice for everyone, which brings us to one last habit.</p> <h2>Don't think that renting comes with a stigma</h2> <p>Millennials are less averse to renting apartments later in life than both baby boomers and Gen Xers. In fact, the apartment market around the country is in the middle of a boom, with more people of all ages choosing to rent instead of owning a home.</p> <p>Renting has become a preferred way of living for a growing number of people. Need proof? Landlords keep increasing monthly rents to historic levels, something they'd struggle to do if the renters weren't coming. Apartment company Abodo said that in March of this year, the median monthly rent of a one-bedroom apartment across the United States stood at $1,005.</p> <p>In major cities, where many prefer to rent, monthly rents are especially high. Abodo reported that in San Francisco the median monthly rent stood at $3,415 in March 2017, while it hit $2,705 in New York City and $2,549 in San Jose, California. Other markets with high monthly rents include Boston ($2,398); Washington, D.C. ($2,097); Los Angeles ($2,030); and Oakland ($2,009).</p> <p>If you prefer to rent &mdash; and you aren't interested in the yard work and upkeep that come with owning a home &mdash; don't feel pressured to make the move to owning. You'll have plenty of company when it comes to renting an apartment.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-home-buying-habits-we-can-learn-from-millennials&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Home-Buying%2520Habits%2520We%2520Can%2520Learn%2520From%2520Millennials.jpg&amp;description=4%20Home-Buying%20Habits%20We%20Can%20Learn%20From%20Millennials"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Home-Buying%20Habits%20We%20Can%20Learn%20From%20Millennials.jpg" alt="4 Home-Buying Habits We Can Learn From Millennials" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-home-buying-habits-we-can-learn-from-millennials">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/rent-your-home-or-buy-heres-how-to-decide">Rent Your Home or Buy? Here&#039;s How to Decide</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-your-house-is-not-an-investment">Stop Thinking of Your House as an Investment</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-equity-in-your-home">How to Build Equity in Your Home</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-biggest-regrets-of-new-homeowners">8 Biggest Regrets of New Homeowners</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-money-moves-to-make-for-tomorrows-mortgage">6 Money Moves to Make for Tomorrow&#039;s Mortgage</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing American Dream apartments home buying homeownership lessons loans millennials mortgages renting Wed, 28 Jun 2017 09:00:12 +0000 Dan Rafter 1970390 at http://www.wisebread.com 5 Times Buying a Home With Cash Is Bad for Your Budget http://www.wisebread.com/5-times-buying-a-home-with-cash-is-bad-for-your-budget <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-times-buying-a-home-with-cash-is-bad-for-your-budget" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/house_building_insurance_housewarming_loan_real_estate_home_concept.jpg" alt="House building, insurance, housewarming, loan, real estate, home concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Buying a home with cash is usually considered a smart financial move, if you can swing it. That's because taking out a mortgage loan to finance your home requires you to pay a ton of interest, even in today's low-interest rate environment. With cash, you don't have to worry about interest at all.</p> <p>For example, let's say you take out a 30-year, fixed-rate mortgage of $200,000 at an interest rate of 3.93 percent. You'll pay more than $140,000 in interest if you take the full three decades to pay back your loan. If you pay in cash, that $140,000 stays in your pocket.</p> <p>What could possibly be the downside of paying this way? Here are a few possibilities.</p> <h2>1. When making an all-cash offer will deplete your savings</h2> <p>If you can afford to buy that $300,000 home with cash, that's great. But if that purchase leaves you with little or no money in your savings, it can put you in financial jeopardy.</p> <p>It's important to have cash reserves to handle life's emergencies. What if you lose your job? You might wish you still had some of those savings available.</p> <p>Remember, your investment in your home is largely <em>illiquid</em>. To access it, you'll have to sell your home or take out a home-equity loan or line of credit. Neither option is as appealing as having cash reserves on hand.</p> <p>If you do have plenty of cash &mdash; but not enough to have funds leftover after buying a home &mdash; consider coming up with an extra-large down payment instead. This way, you can reduce your mortgage while keeping some cash on hand.</p> <h2>2. When your cash is earning you money</h2> <p>Are your cash savings earning you plenty of big returns? Then it might not make sense to take a big chunk of this money and invest it in a house. Yes, it's nice not to have to make a mortgage payment each month. But you'll have to determine if the return that your invested dollars are generating outweighs the savings in interest you'd get by avoiding a mortgage.</p> <h2>3. When you'll miss out on a tax break</h2> <p>Homeowners can deduct the amount of interest they pay on their mortgage loans each year. This tax break is more valuable during the earliest years of a mortgage, when homeowners are paying the most interest.</p> <p>You'll have to determine how valuable this tax break is to you. If you do need to reduce your tax bill each year, using some of your cash to come up with a bigger down payment and then taking out a mortgage to finance the rest of your home purchase might make the most sense.</p> <h2>4. When your home's value might fall</h2> <p>There was a time when no one thought homes could lose value over a seven- or 10-year period. Then came 2007 and 2008, when home values suddenly plummeted.</p> <p>There's a lesson here: There is no guarantee that your home will increase in value after you buy it. There's also no guarantee that it won't lose value.</p> <p>The hope is that after buying your home in an all-cash offer, the property will become even more valuable. When it's time to sell, you'll earn a profit. But there is no guarantee that this will happen. And if you do have to sell your home at a loss one day, that money you invested in it will be lost.</p> <h2>5. When you'll miss out on great interest rates</h2> <p>Mortgage interest rates have risen, but they are still at historic lows. The Freddie Mac Primary Mortgage Market Survey says that the average interest rate on a 30-year, fixed-rate mortgage was 3.89 percent as of June 8, 2017. The average rate on a 15-year, fixed-rate mortgage was 3.16 percent. Those are great rates.</p> <p>Instead of investing a big chunk of your cash in a home, it might make more sense to take that same money and make a different investment that will generate bigger returns. You can then apply for a mortgage loan with the shortest possible term and enjoy interest rates that are still at near-historic lows.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-times-buying-a-home-with-cash-is-bad-for-your-budget&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Times%2520Buying%2520a%2520Home%2520With%2520Cash%2520Is%2520Bad%2520for%2520Your%2520Budget.jpg&amp;description=5%20Times%20Buying%20a%20Home%20With%20Cash%20Is%20Bad%20for%20Your%20Budget"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Times%20Buying%20a%20Home%20With%20Cash%20Is%20Bad%20for%20Your%20Budget.jpg" alt="5 Times Buying a Home With Cash Is Bad for Your Budget" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-times-buying-a-home-with-cash-is-bad-for-your-budget">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-to-consider-before-buying-a-home-when-youre-single">5 Things to Consider Before Buying a Home When You&#039;re Single</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-equity-in-your-home">How to Build Equity in Your Home</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-signs-a-seller-should-pass-on-a-home-offer">6 Signs a Seller Should Pass on a Home Offer</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-home-buying-habits-we-can-learn-from-millennials">4 Home-Buying Habits We Can Learn From Millennials</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-your-mortgage-off-early">Should You Pay Your Mortgage Off Early?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing down payments downsides home buying homeownership interest rates mortgages new home paying cash tax breaks Thu, 22 Jun 2017 08:30:16 +0000 Dan Rafter 1965874 at http://www.wisebread.com How to Build Equity in Your Home http://www.wisebread.com/how-to-build-equity-in-your-home <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-build-equity-in-your-home" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/imagine_owning_our_dream_house.jpg" alt="Imagine owning our dream house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Equity is the difference between what you owe on your mortgage loan and what your home is currently worth. Say you owe $150,000 on your mortgage and your home is worth $200,000. You now have $50,000 worth of equity built up in your home. Congratulations!</p> <p>Equity is important when you sell your home. If you sell the home in the above example for $200,000, you'd end up with a sizable check, whatever is left of that $50,000 equity after you subtract your real estate agent's commission and any other fees you might have to pay to close the sale. (See also: <a href="http://www.wisebread.com/8-unexpected-costs-of-selling-a-home?ref=seealso" target="_blank">8 Unexpected Costs of Selling a Home</a>)</p> <p>You can also tap your home's equity for home equity loans or home equity lines of credit. Maybe you want to remodel your bathroom. If you have enough equity, you can take out a home-equity loan of, say, $20,000 to pay for it. You can also rely on home equity loans to pay for a child's college tuition or pay off high-interest credit card debt.</p> <p>And if you ever want to refinance your mortgage loan to one with a lower interest rate, you'll usually need equity to do so. Most lenders won't approve a refinance unless you have at least 20 percent equity built up in your home.</p> <p>So how do you build equity? Mostly by making your mortgage payments on time and hoping that the value of homes in your local housing market continues to rise.</p> <h2>Keep making your mortgage payments</h2> <p>Every time you make a mortgage payment, you'll gain a small bit of equity, as long as your home's value isn't falling at the same time. But don't think that if you are paying $1,500 each month, you are gaining $1,500 worth of equity with every payment. Not all of your monthly payment goes toward reducing your mortgage's principal balance.</p> <p>There's something known as PITI, which stands for principal, interest, taxes, and insurance. This means that a portion of each of your mortgage payments goes toward paying off your loan's principal balance, interest, property taxes, and homeowners insurance. Only the portion that goes toward paying off your principal helps you build equity.</p> <p>In the earliest days of your payments, a greater chunk of your mortgage check will be used to pay off interest. The deeper you get into your mortgage's life span, the more principal you'll pay off with each payment &mdash; and the more equity you will gain.</p> <h2>Count on rising home values</h2> <p>When you buy a home, you hope that its value will continue to increase. If your home does rise in value, the equity you have will automatically increase.</p> <p>If your home is worth $200,000 and you owe $190,000 on your mortgage, you have $10,000 in equity. But if your home's value was instead $210,000, owing that same $190,000 would leave you with $20,000 worth of equity. Just be aware that your home is not guaranteed to rise in value.</p> <h2>Make a bigger down payment</h2> <p>If you are using a mortgage to finance the purchase of a home, you'll usually have to come up with a down payment. With some loan products, that down payment can be as low as 3 percent of your home's purchase price. For a home costing $200,000, a down payment of 3 percent comes out to $6,000.</p> <p>The larger your down payment, however, the more equity you'll have as soon as you take ownership of your house. When you reach 20 percent equity, you'll no longer have to pay private mortgage insurance (PMI). That's why if you can afford it, it makes financial sense to come up with as large of a down payment as possible. (See also: <a href="http://www.wisebread.com/do-you-really-need-a-20-percent-down-payment-for-a-house?ref=seealso" target="_blank">Do You Really Need a 20 Percent Down Payment for a House?</a>)</p> <h2>Take out a shorter mortgage</h2> <p>Taking out a loan with a shorter term means larger monthly payments. But it also means that you'll build your home's equity at a faster pace. If you take out a 15-year, fixed-rate mortgage instead of a 30-year, fixed-rate loan, your monthly payment will be significantly higher because you are stretching out your payback period over a smaller number of months.</p> <p>But that larger monthly payment also means that you'll be reducing your mortgage's principal balance by a greater amount each month, something that will help you build equity much faster. This is one reason why, if you can afford the larger monthly payment, a shorter-term mortgage is a smarter financial move. Just be careful not to take a shorter-term mortgage if the monthly payment will be a struggle.</p> <h2>Make bigger mortgage payments each month</h2> <p>You can increase the speed at which you gain equity by making larger mortgage payments each month, as long as you tell your lender that you want this extra money to go toward paying down your loan's principal balance.</p> <p>If you owe $1,700 each month on your mortgage, you might instead send a check for $1,900, with the extra $200 allocated to paying down your principal. Your lender's mortgage statement probably has a line that you can fill out stating that you want your extra money to go toward principal. Make sure to fill that out.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-build-equity-in-your-home&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Build%2520Equity%2520in%2520Your%2520Home.jpg&amp;description=How%20to%20Build%20Equity%20in%20Your%20Home"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Build%20Equity%20in%20Your%20Home.jpg" alt="How to Build Equity in Your Home" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/how-to-build-equity-in-your-home">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-to-consider-before-buying-a-home-when-youre-single">5 Things to Consider Before Buying a Home When You&#039;re Single</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-biggest-regrets-of-new-homeowners">8 Biggest Regrets of New Homeowners</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-home-buying-habits-we-can-learn-from-millennials">4 Home-Buying Habits We Can Learn From Millennials</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-really-need-a-20-percent-down-payment-for-a-house">Do You Really Need a 20 Percent Down Payment for a House?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-qualify-for-a-mortgage-with-a-small-downpayment">5 Ways to Qualify for a Mortgage With a Small Downpayment</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing down payments equity homeownership interest loans mortgages principal Tue, 20 Jun 2017 09:00:08 +0000 Dan Rafter 1966194 at http://www.wisebread.com 4 Questions to Ask Before Leaving Your House to Your Kids http://www.wisebread.com/4-questions-to-ask-before-leaving-your-house-to-your-kids <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-questions-to-ask-before-leaving-your-house-to-your-kids" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_handing_a_house_key_to_woman.jpg" alt="Man handing a house key to woman" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You might consider it the perfect gift: You are ready to move out of your home and downsize into a smaller condo or move into an assisted-living facility. Instead of selling the house, you'd like to gift it to one or more of your children.</p> <p>This is a generous act, but it also comes with some serious consequences. In most cases, if you want to leave your home to a relative, it's best to do so as an inheritance <em>after </em>you die rather than as a gift.</p> <p>Before you gift your residence, consider these key factors.</p> <h2>The big tax implications</h2> <p>Gifting your children your house might eventually leave them with a big tax bill. The reason is something known as the home's tax, or cost, basis.</p> <h3>How does tax basis work?</h3> <p>When you gift a home to a relative, the original cost of the home is now also considered the cost basis for the person to whom you are giving the residence, even though this person isn't paying anything for it. For instance, if you give your child a home on which you spent $170,000 10 years ago, that property's tax basis remains $170,000, even if an appraiser would determine that the residence is worth $270,000 in today's housing market.</p> <p>If you give a home to your children as part of your inheritance after you die, though, the tax basis is whatever the home is worth in the <em>current </em>market. Even if you only spent $170,000 on your home, the tax basis of the property would be considered $270,000 if that is what it is worth today.</p> <p>This subtle difference can have a big impact on the person to whom you've gifted your home.</p> <h3>What about the capital gains taxes?</h3> <p>If your children decide to sell the home you gifted them right away, they could face a big tax hit. If the home's tax basis is $170,000 and your children sell it for $270,000, they'll have to pay capital gains taxes on the profit &mdash; in this case $100,000. If you had left the home to your children as part of their inheritance, they could have avoided these capital gains taxes. That's because the tax basis would have been $270,000. If they then would have sold the home for that same figure of $270,000, they would not have had to pay any capital gains because officially the house sale would not have generated a profit.</p> <p>Your children can avoid capital gains taxes by living in the house that you have gifted them for at least two years before selling it. In this case, your children can skip capital gains taxes on up to $250,000 in profits from the sale of the home. Couples can skip paying capital gains taxes on up to $500,000 on a home they sell if they have lived in it for at least two years.</p> <p>If you don't know if your children will actually live in the house for at least two years before selling it, leave the home to them as part of their inheritance. It's the better financial move for them.</p> <h3>Is the timing right?</h3> <p>There are times, of course, when you simply can't hold onto a house so that you can leave it to your children as part of their inheritance. In such cases, gifting the house might make sense.</p> <p>Say one of your children desperately needs a place to live now. Waiting until you die to pass the home to this child won't be much of a help.</p> <p>Or what if you are moving into assisted-living and can no longer maintain your home? Letting it sit vacant might speed up its deterioration. Your children might be willing to maintain the home until you die and it passes to one of them through an inheritance. Or maybe they'd rather not. Gifting a home to one of your children might be the best way to keep the home in the family.</p> <h3>Are you gifting the mortgage, too?</h3> <p>Gifting becomes more complicated if you still owe mortgage money on the home. That mortgage won't disappear simply because you are gifting the home to one of your children.</p> <p>The person receiving the home will be responsible for paying the mortgage each month. Make sure this is a financial responsibility that the child receiving the home is willing and able to take on.</p> <p>Some mortgage lenders might &quot;call in&quot; your mortgage loan when you gift the house. This means that either you or your child must pay whatever the balance is on your mortgage. If this is a small amount, it might not matter. But if you owe a significant amount on your loan and neither you nor your child can pay it, the mortgage lender will have the right to foreclose on your property and take ownership of it.</p> <p>Make sure that either you or the child who receives the home is able to take care of any mortgage issues.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-questions-to-ask-before-leaving-your-house-to-your-kids&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Questions%2520to%2520Ask%2520Before%2520Leaving%2520Your%2520House%2520to%2520Your%2520Kids.jpg&amp;description=4%20Questions%20to%20Ask%20Before%20Leaving%20Your%20House%20to%20Your%20Kids"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Questions%20to%20Ask%20Before%20Leaving%20Your%20House%20to%20Your%20Kids.jpg" alt="4 Questions to Ask Before Leaving Your House to Your Kids" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-questions-to-ask-before-leaving-your-house-to-your-kids">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-a-home-sale-could-fall-through">5 Reasons a Home Sale Could Fall Through</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-your-house-is-not-an-investment">Stop Thinking of Your House as an Investment</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-questions-to-ask-during-an-open-house">20+ Questions to Ask During an Open House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-to-consider-before-buying-a-home-when-youre-single">5 Things to Consider Before Buying a Home When You&#039;re Single</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-turn-your-home-into-a-moneymaking-star">How to Turn Your Home Into a Moneymaking Star</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing adult children capital gains taxes cost basis gifting heirs homeownership selling a home tax basis transferring ownership Mon, 19 Jun 2017 08:30:15 +0000 Dan Rafter 1961861 at http://www.wisebread.com