Tuesday, February 26, 2013

Beware: Cost vs. Value Gap

Thinking of doing a remodel or updating your home?  Not all improvement projects are created equally, so do some research before your rush off to the hardware store!


The 2013 Cost vs. Value Report, co-published by Remodeling Magazine and Realtor Magazine, shows that “curb appeal” improvements are catching buyers’ eye more than anything else these days.  In fact, the project with the highest return on investment will actually cost you the least- simply replace your front door! 

Other chart topping improvements include window replacement, wood-deck additions, and garage door replacement.  If you’re prepared to spend more money, consider doing a kitchen upgrade or replacing your home’s siding with fiber-cement or foam-backed vinyl.  You may want to steer clear of home office remodels and garage additions that will only recoup about 40-47% of their cost. 


(Source: Remodeling Magazine)   


If you’re curious about your home improvement options and the local professionals best suited for the job, you may want to stop by the Midland Home & Garden Show March 1-3 at Northwood University’s Hach Student Activity Center.  Hours are Friday 4-8pm, Saturday 9am-6pm, and Sunday 11am-4pm.  Tickets are $4 for adults and $3 for seniors, kids 17 and under are free. 


For more information about the cost vs. value of home improvement projects in your region, visit Remodeling or REALTOR Mag.
Have you experienced a gap in improvement project cost and value? leave a comment and tell us about it!

Monday, February 25, 2013

Refinancing Again


We're constantly bombarded by lenders to refinance our mortgage under a variety of programs. The volume of offers can almost make you numb to the rational consideration.
There are common rules of thumbs that homeowners and agents use such as not refinancing more often than every two years or there must be at least 2% savings from your previous mortgage rate may not always be accurate.
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The reality is that if you can refinance for a lower rate and you'll be in the home long enough to recapture the cost of refinancing, it should be considered. The costs of previous refinancing that haven't been recaptured by monthly savings may need to be added to the costs of the new refinance.
Take a look at the chart that shows the average rates according to Freddie Mac for 2012. They are lower today than they were in January of 2012 and for the ten years before that.
Refinancing may save you a substantial amount of money, especially if you're going to be in your home for a long time. It is definitely worth investigating. To get a quick idea of what your savings could be, use this refinancing calculator.

Monday, February 18, 2013

It Shows Better


If it shows better, it will probably sell faster and maybe for more money. Once your home is on the market, it's time to look at it like a commodity and through the eyes of potential buyers. In all likelihood, you'll need to take care of these items eventually, so do them now to help it sell sooner.checked_house.jpg
  1. Make repairs - it doesn't matter if it's been that way since you bought it. You need to fix it so that the buyer doesn't think that the rest of the house is about to fall apart.
  2. Not too personal - you may have bought your home to express yourself but if the buyer can't see themselves in the home for all of your things, it's going to take longer to sell than you want.
  3. Drive-up appeal - the old saying "you never get a second chance at a first impression" applies to your home too. They may never even get out of the car to come inside.
  4. The nose knows - it may not smell like home but it shouldn't smell like a place they would never consider living.
  5. Neutral colors, decor, etc. - these are not decorating tips you'll see in magazines but the truth is that bold colors and designs are difficult for most people to see beyond. They'll imagine their things better in neutral surroundings.
  6. Less looks like more - removing some of the non-essential things from your home will eliminate clutter and make the home feel larger. The same suggestion applies to cabinets and closets.
A confused mind will not make a decision. Identify and eliminate items that could derail a potential sale. The preparation you make in the beginning will help the presentation to your buyers.

Monday, February 11, 2013

More Expensive Than Expected



The 3.5% down payment on FHA loans could be more expensive for buyers than expected. Beginning April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35% which may not even be noticeable to most would-be homeowners.
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The staggering increase will occur on 6/3/2013 when FHA's policy on the duration of the required mortgage insurance will be increased for the life of the mortgage. It basically doubles the amount of total MIP if the loan is paid to term.


Example: Purchase Price $175,000 with 3.5% down payment at 4% mortgage rate on 30 year term

CurrentAfter 6/3/13
MIP duration78% of original loanLife of mortgage
Cumulative premium$20,838.24$42,447.93

Currently, the MIP is required for approximately 9 years 9 months with normal amortization. The new program would require the MIP for the life of the loan. In this example, the initial monthly MIP is $196.88 which decreases based on amortization.
There are buyers that qualify on income and credit who may not have the necessary additional down payment required for 80% and 90% conventional loans. The 3.5% FHA program has provided a great vehicle to get into a home with a minimum amount of cash.
For homeowners that expect to stay in their home for ten years or less, the new changes might not have much financial impact. Homeowners who expect to be in their home long term can refinance with a conventional loan without mortgage insurance once the equity has increased due to amortization and appreciation.
For buyers to avoid these increases, they will need to act now to get the FHA commitment issued prior to these change dates.

Monday, February 4, 2013

Before You Leave Home


The last thing you want to do while you're on a trip is to worry about someone burglarizing your home. Use this checklist to add some peace of mind to your travel plans.

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  • Ask a trusted friend - to pick up your mail and newspaper and keep the yard free of trash and advertisements.
  • Stop your mail but maybe not your newspaper - you can easily handle this online by going to the US Postal Service's Hold Mail Service. A recent story implicated an employee from a major newspaper who was passing customer hold requests to burglars.
  • Don't post about your trip on Facebook and Twitter until you return - some burglars actually look for this type of announcement to schedule their activities.
  • Do notify police and/or neighborhood watch - especially if you're going to be gone for more than just a few days. Let your monitoring service know when you'll be gone and if someone will be checking on your home for you.
  • Light timers make it look like someone is home - use several set for different times to better simulate someone at home.
  • Do unplug certain appliances - TVs, computers, toaster ovens that use electricity even when they're off and to protect them from power surges.
  • Don't hide a key - burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.
These easy-to-handle suggestions may protect your belongings while you’re gone while adding a level of serenity to your trip.