If you are locked in a high-rate mortgage that is affecting your finances, you might have considered refinancing your house However, it is not a miracle solution for everyone. A common misconception is that refinancing your home essentially consists in updating the terms of your real estate loan. It is not: refinancing your mortgage comes down to taking down a new mortgage entirely.
To know if it is the right choice for you, here are a few things you must consider before taking the plunge.
1. How does the terms of your current mortgage compare to your new terms?
Unlike a personal or auto loan, refinancing your mortgage is not free: it comes with closing fees, usually equivalent to 1 to 5% of your new loan amount. For a new mortgage to be worth it, you must consider the difference in interest rate between your new and your old mortgage. How long will it take you to recoup the impact of your closing costs with your new loan?
A rule of thumb is that your new mortgage interest rate should be at least one point lower than your previous rate to be worth it.
How does the terms of your new mortgage will affect your private mortgage insurance? If your house equity has increased during the life of your previous loan, you might not need to pay PMI anymore. However, if the value of your house has decreased, you might need to start paying for a PMI.
Another thing to consider is how far from the break-even point you are in your current mortgage: if you are planning to move at short to medium term, but that you have been paying your current mortgage long enough that your payments go towards the principal of your loan rather than the interest, refinancing might not be an interesting option.
Refinancing can also be an interesting option if you want to change the type of mortgage on your real estate property entirely. If you started with an Adjustable Rate Mortgage, you might qualify for a lower fixed-rate mortgage.
2. Can you qualify for a new loan with better terms than your previous one?
Like for any new real estate loan, your lender will consider several factors before granting you a new mortgage. Don’t hesitate to shop around to see which lender might be willing to offer you more interesting terms.
If your credit score has gone up since you got your old loan, refinancing with better terms might be interesting for you. However, if you have fallen on some hard time and your credit score has taken a hit, refinancing might cost you more. If that is the case, spending some time working on improving your credit score before refinancing will save you money in the long run.
How much equity you have in your house will also be crucial for your lender to decide on the terms of your loan: if the house values in your neighborhood are going down, now might not be a good time to refinance. To qualify for more advantageous terms, you should have at least 20% of equity in your house.
Lenders will also consider your debt-to-income ratio before granting you new terms to your real estate loan, so pay off whichever debt you can before applying for refinancing.
3. What is your goal for your house?
Before refinancing your home, you must ask yourself why you want to apply for a new loan. Getting a lower down payment is only the short answer to a more complex question.
If you are planning to move in the semi-near future, refinancing probably will not save you any money.
Refinancing can be an interesting option if you are trying to pay off your real estate property sooner than later, before retiring for example, refinancing your mortgage from a 30-years term to a 15-years term can raise your monthly payments but will save you money in the long run since you will not spend as much on interest.
Refinancing might also allow you to cash-out on your house equity. However, consider this option carefully before spending this money on your dream vacation, and use it to improve your equity on your house instead.
In conclusion, there is no one-fits-all solution when it comes to refinancing. The best thing you can do before taking this decision one way or another is to meet with a financial advisor who will be able to help you figure out what is the best course of action in your particular circumstances.
Fires can be a dangerous thing, especially when it causes damage inside of a home. It can not only be a horrific thing to experience, but it can cause thousands of dollars in damage. As you may have guessed already, this can make it very difficult to sell the home. Fortunately, in most cases home insurance can cover most of that costs from the damage but even then, the homeowner(s) will still be left with damage that will need repairs. In most cases because of the cost, the homeowner(s) may think about selling the house with fire damage. For those who are thinking about selling their house with fire damage, here are 5 tips on how to sell your home with fire damage:
1. AskYour Agent About A Restoration Company assuming that you have already contacted your insurance company because of the fire which is initially the first step, you may want to ask your agent for some recommendations for a restoration company. During this time, you will also want to start cleaning up any soot or water damage from trying to put out the fire. If you do not clean up the water damage right away, you see mold start to form.
2. Separate Damaged Items for Insurance PurposesThe insurance company will most likely want you to take a detailed inventory list (photos and descriptions) of all of the items that were damaged in the fire. Once you’ve separated the items, it will be easier to document a detailed list. Some of the things that the list should include are; the make, model, serial number, date you purchased the item, how much you paid, and a short description of the item.
3. SeparateNon-Damaged Items as WellAfter fire damage inside of a home, your items will more than likely be exposed to most of the damage. But the items that were not affected by the fire should not be exposed to the items that are damaged. Make sure to move them to a safe area, like a garage or a storage unit to make sure they are not stolen or damaged.
4. Work with the Insurance Company During the Process
Fire damage claims are usually a top priority for an insurance company, so an adjuster will be quick to inspect the property within a few days. In order to make sure your claim is processed as soon as possible, make sure to be prepared to provide documents in a timely manner.
5. Find Somewhere Else To Stay If Your Home Is Not Livable
Finally, If your home is not in a livable condition due to the fire damage, you will need to make arrangements to stay somewhere else until then. Most insurance companies and policies will cover food, clothing, and housing that your family might need, but this still depends on the policy you have with your insurance company.
Selling Your House with Fire Damage
When listing the home with a realtor, you will most likely end up receive a cash offer from a cash home buying company. Most people who buy houses with fire damage are investors. They will purchase the house with the intent of fixing it up and selling it at a later date. So, keep this in mind when trying to sell your home with the fire damage when dealing with a realtor. Investors will typically pay a little less than the average buyer, and that’s because they are taking into account all of the risk.
Your living room is where you spend the most time. This is where you decompress after a long day at work and where you reconnect with your family. Yet, so many living rooms of today feel like they’re trapped in the wrong decade. What better room to remodel than the one you use the most?
In the past, living rooms were traditionally kept small and closed off. This was necessary to conserve energy, especially in colder climates. Today, we have more efficient heating and A/C systems. That need for enclosed spaces simply isn’t necessary anymore. Living rooms are larger than ever thanks to the open floor plan movement and a modern push for more space.
How do you know it’s time to remodel your living room? If you’ve been putting off that makeover, read through these signs to determine if it’s finally time to take the plunge with your remodel.
1. Your Space Isn’t Functional
While most people think about the kitchen when discussing functionality, your living room can also get in the way of your daily life. Think about the times when you expect the most out of your living room. Perhaps you can’t watch your kids while cooking dinner because there’s a wall separating the two rooms. Maybe you don’t have the space to host your friends.
If you’re always struggling with ways to getting more use out of your living room, odds are it’s time for an upgrade. Working with a contractor to remove a wall, install a counter, or construct some storage space will likely transform the space.
2. Your Living Room Feels Out of Date
Sometimes your space just doesn’t feel like it belongs in this time and place. Does your fireplace look like it’s from the 1960s? Do the fixtures age your home? These small things date your house and clash with modern designs.
The good news is it’s easy to swap out these minor things and make a big change. For instance, add a veneer to your fireplace to bring it into the 21st century or upgrade your light fixtures. Also, never underestimate the power of a fresh coat of paint.
3. It’s Too Dark
Letting light into your living space helps your home feel more livable. Natural light prevents rooms from feeling tired and drafty. Outdated windows are small, cloudy, and date your space. Replacing your windows with fresh new ones adds new life. Plus, though an expensive upgrade, you can count on windows returning 80% or more at resale.
It’s time to let in the light. Be conscious of the direction of your windows, their fixtures and shades, and also outdoor shrubbery. A poorly placed tree or bush, for instance, could be blocking that afternoon light.
4. You Need More Space
Sometimes we simply outgrow our homes. If that’s the case, it might be time to go home shopping for more space. However, it’s worth looking for other ways to add space to your living room. If it feels like your family members and their belongings are crawling over each other with your daily tasks, look for some faux adjustments to create the illusion of more space.
Lighter colors on the walls, white ceilings, and the right sized area rug all contribute to a feeling of extra space. Additionally, keep your storage hidden and out of sight to avoid the appearance of clutter. Adding some built-in shelving or storage solutions will help with this.
5. Your Flooring is Old
Finally, old flooring shows the age of your home. Whether you’ve still got stale carpet from the 70s or cheap linoleum floors, these small things make your home look more than just lived in. The wrong flooring can even seem dirty no matter how much you clean it. Think of how many people have walked on that floor throughout the years. If your flooring is getting in the way, it’s time to upgrade.
The good news is flooring is one of the best investments you can make in your property. For instance, 54% of buyers were willing to pay more for homes that featured hardwood flooring. If you don’t have the budget for a larger flooring remodel, just start with your living room. The bedrooms and kitchen areas often keep different flooring without seeming out of place.
Do you notice any of the signs above in your own home? If so, it’s time to seriously consider a remodel. Even a few minor upgrades will bring your home into this century and increase your home value. Everyone wants their living room to actually be livable.
Jim who had no experience in buying a house decided to buy a house without the help of a professional. He intended to buy the house and start living despite his naivety of some hidden costs. Unfortunately, he was faced with a huge bill of mortgage insurance, conveyance fee, taxes, among others. At this point, he had no money with him to service these expenses. He had to resort to loan to cover up for the miscellaneous.
Most first-time home buyers are like Jim – uninformed! However, you can set yourself aside from the Jims by familiarizing yourself with costs that are associated with the purchase of houses. The following are the often “overlooked” or “hidden” costs:
Every year, there are cases of real estate fraud. Most of the time, sellers sell non-existing buildings to unsuspecting buyers. Some of the sellers could sell the building to two or more customers. Fraud cases like this could be prevented through inspection and research which would not cost you more than some couples of dollars.
You can also hire the service of an expert to access the building of defects. A licensed inspector can look into some things you might not have imagined in the house. Having inspected the home, you can renegotiate with the seller in case there is a need for repair or some maintenance.
Legal Service fee
You need the service of a solicitor to properly and effectively execute the conveyance of the property you seek. Real estate lawyers would help you with the legal process and papers involved in the purchase of a house. Thus, they are available to draft the conveyance document, research any embargo or lien on the property and advise you on what to do in case there is a problem on the property. It would help if you had a standby lawyer who would verify all the documents you would be given in case the seller’s lawyer chooses to perfect all the paper works. A lawyer would charge you between $500 and $1000.
Another fee that shocks first time home buyers is the conveyancer fee. Most of the time they find the conveyancer fee too high and unnecessary, so they avoid a conveyancer. However, it is essential for there should be a conveyancer to validate the mortgage deal. You should not neglect a conveyancer if you are contemplating of buying your first home. Conveyancers usually charge between $1000 and $ 1500.
Taxes and other Government Charges
If you want to enjoy your stay in your newly bought home, you need to settle the government. Government demands that a new homeowner should pay some amount as mortgage registration fee, stamp duty, and transfer duty. As a rule, you have to pay the property taxes to finance infrastructural, schools and other community works.
Depending on your state, you would pay a minimum of $2, 000 as property tax per year. You can always choose to pay per year, month or four months depending on your pocket.
Repairs and Maintenance
After the previous owners pack out, the building might be left passive for long. The building might have lost its shape and might be seriously defective. You can hire a professional cleaner to clean the house and repair some minor defects. You can also choose to re-design the home to meet your taste. It is always necessary that you have some extra cash for repairs and cleaning to save yourself from embarrassment. The Professional cleaners charges at least $500.
As a homeowner, you will have to service some recurrent bills like utility bills, home insurance, among others. Most mortgage lenders often include home insurance in the deal, so you might not be able to escape it. However, on second thought, the insurance plans would protect you against theft, fire, storm and other related dangers.
Buying a house might be interesting but having no knowledge about the real estate hidden costs for buying a home can sour your experience. This is why you need to plan and budget any charge you may incur before, during and after the purchase of that your dream house. If you ever ask yourself, “how to sell my house Illinois?” you can buy a house without knowing the hidden charges.
Home ownership is expensive. It is something that often causes sticker shock for first-time homeowners. Between regular maintenance and property taxes, the living costs can get a lot higher than they were expecting. However, do you know for sure if you are paying the right amount in property taxes? This article will help you figure out if you can cut down how much you owe the town or city you live in real estate taxes.
1.Check your property’s assessing card.
There is very little you can do about the city’s tax rate, but your property’s assessment is something you should check. Property assessment cards are public, so you should easily be able to access the description that the town or city has of your property, either by looking it up online or by visiting the town assessor’s office directly.
You would be surprised by own many mistakes are commonly made on these reports: some common errors include the square footage of the house, how many bedrooms and bathrooms are included, the condition of the house, etc.
Properties assessment are rarely reviewed if they are in adverse condition: for example, you might have purchased your property as a foreclosure or as an estate sale, and the shape of the house is not as good as it was when it was assessed for the last time.
2. Research the market
The assessed value property taxes are based on is often calculated based on market value. If you recently purchased your property for significantly less money than what it is assessed for, you might be paying too much in property taxes.
If you suspect that your property is overvalued, don’t hesitate to research neighboring properties similar to your own in terms of age, condition, size, number of bedrooms and bathrooms, etc. and see what they are assessed for or recently sold for. Find at least 4 or 5 comparable properties to make your argument.
If you are confident and if the savings you would make on your property taxes justify the cost, don’t hesitate to hire an independent appraiser whose report would make a strong argument in your favor.
3. Investigate which tax exemption you might be qualifying for
You might be pleasantly surprised and find out that you qualify for some property tax breaks, whether it is a tax exemption or a tax credit that you may have to pay back eventually.
Common property taxes exemptions and credits include:
- Seniors, especially those on a fixed or limited income
- Service members and veteran
- People with a disability
However, you might also qualify for a property tax exemption or credit if you are a first-time homeowner or if your property is located on a large piece of land under the homesteading exemptions.
Like all tax related subjects, these exemptions vary by state, localities, and your situation so contact a tax professional, a tax advisor or your local tax authority to find out what you might qualify for.
4. Appeal for a tax abatement
You can appeal for a tax abatement within specific dates depending on the town your property is located.
Before appealing for an abatement, you must be very confident that you will qualify for one. If the tax assessor finds that your property is under-assessed, if you recently made improvements such as additional square footage or a new deck, for example, you would be at risk to see your property taxes increase instead of going down.
Don’t hesitate to walk with the tax assessor to indicate any adverse conditions, like a noisy highway or a nearby factory.