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Home Ownership

Home Warranties- A Look at the Good and the Not So Good

Renters have a few advantages over homeowners. When you own your own home, you are solely responsible for repairs and maintenance, which can get really expensive. One thing that homeowners might consider is purchasing a home warranty- but are home warranties really worth it? Let’s look at the facts so that you can make an informed decision that is good for your home and for your wallet.

How Much Do Home Warranties Cost?

Home warranties aren’t cheap. If you are considering a policy you should plan on paying somewhere in the range of $300 to $600 each year. Of course, there are some policies that are less and a few that are quite a bit more expensive. In addition to your annual premium, you will also have to pay a deductible each time you need a repair. Once again, the amount of your deductible will vary based on the policy you choose. Generally you can expect to pay between $50 and $100 per service call.

What Do Home Warranties Cover?

While home warranties aren’t cheap, they do offer quite a bit of protection to homeowners. Generally policies cover all of your home’s major appliances including the fridge, the dishwasher and the heater. Most policies also cover your electrical and your plumbing. In case you run into electrical problems at night find a 24 hour emergency electrician near me. Some policies allow you to add in additional appliances like the washer or dryer. When it comes to policies, no two are alike, so make sure that you know what type of coverage you are considering. Every policy is different.

How Do Home Warranties Work?

If you have a home warranty in place and something breaks down, go online to WhittonPlumbing.com now and see your options, you will contact your home warranty company first. They will then arrange for repair or replacement of your damaged item. All you pay is the deductible and the remainder of the repairs will be handled at no charge. This can make repairs very easy and stress-free. You won’t have to worry about finding  a great plumber, electrician and oven repairman, the warranty company will be your call when something goes wrong. Bear in mind that if you have multiple items break down, that you will have to pay your deductible twice even if you only have one service call.

What Don’t Warranties Cover?

Home warranties won’t cover everything in your house. Each policy varies, but generally they do not cover pre-existing problems. They also won’t cover items that are damaged due to inappropriate use. This means that if you throw a wild party at your house and break the dishwasher in the process, you won’t be covered. If you attempt a repair and do not succeed, you can also void your warranty. Each policy is different, but most contain various loopholes and restrictions that your home warranty provider can use to keep from paying for repairs.

Are Home Warranties Worth the Expense?

Home warranties can be a great way to protect your finances. Think about it, if your dishwasher breaks down and needs to be replaced, it will cost you at least $300. If your home warranty costs $400 per year and you have a $50 deductible, you have almost paid for your policy in just one repair, and the dishwasher is one of the least expensive major appliances in your home.

On the other hand if you have a newer home and newer appliances, you might not really get the value from your home warranty. If nothing breaks down, you are out the yearly premium and you receive nothing in return. Also since policies can have loopholes, you may find that your policy excludes your damage.

Another thing to keep in mind is that home warranty companies will always choose to repair if possible. They know that replacing items is expensive and if there is any way to keep your 20 year old heater working, they will patch it back together. Since you have to pay your deductible each time a repair is needed, there may come a time that it is cheaper to replace an item yourself rather than calling out the home warranty company again.

Tips for Shopping for Policies

If you are planning on purchasing a home warranty, here are a few tips that will help protect you and your finances.

  • Read Your Policy Carefully- Since home warranty policies can be filled with loopholes and exceptions, make sure that you read the entire policy carefully. Before committing to a plan you should know which appliances are covered, what you have to pay and what your responsibilities are in regards to maintenance of your appliances.
  • Shop Around-  Don’t turn to the first company that you find. Look at several top companies and compare. It is a good idea to look at several aspects of each company when comparing. If you only look at price or coverage you won’t get a clear picture of which company is the best for you.
  • Choose Reputable Companies- There have been cases of home warranty companies refusing to make repairs and ripping off their clients. Always make sure that you check out the companies that you are considering. The Better Business Bureau is a great place to check providers for complaints.
  • Use Your Policy- If you have a home warranty, make sure that you use it. Don’t attempt repairs on your own or replace equipment without first checking with your home warranty company. If you pay for the policy, you need to make sure that you use it.

A home warranty can be a great choice for protecting your home and your finances if you are a homeowner. When appliances fail, it can be very expensive to replace them. With a home warranty, you don’t have to worry about not being able to afford important repairs. However, they aren’t for everyone or every situation.

 

Home Ownership

What The Proposed New Mortgage Lending Rules Mean For Housing

When the housing market collapsed from the sub-prime mortgage crisis in 2008, the blame was laid squarely at the feet of banks and brokers who deliberately approved loans they knew were doomed to fail.  In the years since the initial collapse, lending has become much more restrictive as lenders, buyers, and the federal government fight to avoid another crisis.

In fact those restrictions are about to get much stricter beginning in January next year.  The Consumer Financial Protection Bureau or CFPB, which informs mortgage applicants about the terms of their agreements with lenders, wants tougher mortgage lending rules to restrict the volume of new loans in 2014.

The CFPB argues the rules are necessary to protect American households.  Average household debts across the country are near record highs, with a large percentage of those debts tied up in household financing.

But critics believe that the new rules could go too far, and reverse the newfound strength in the housing market after years of stagnant growth.  Americans are feeling confident about their plans to buy homes, but the new CFPB rules could mean as many as 50 percent of current applicants will be rejected by the new year.

A proper middle ground is required.  The US – and the rest of the world by extension, cannot afford to go through another global meltdown similar to the crisis begun in 2008.  This means that restrictions must be in place to prevent the type of sub-prime mortgage lending that led to the housing collapse.

On the other hand, rules that are too restrictive will prevent a greater number of applicants from being approved for financing.  If there are fewer people qualified to buy homes, the housing recovery will stall, if not reverse entirely.  Americans across the country are nearly unanimous in the belief that the housing market is crucial to the economic recovery as a whole – stalled progress on housing could mean another slide in economic stability.

The important thing for policymakers to remember is what Americans have come to learn on their own – balance is essential.  People will continue yearning to own a home of their own, but recognize they must fulfill that dream through a mortgage that is affordable.  Comparing offers from multiple lenders prior to locking in an agreement can help people get the best possible deal without committing to terms that are doomed to fail.

Home Ownership

How Can You Use a Second Mortgage to Finance Your Home Improvements?

Do you have any plans of getting your house renovated?  Do you plan to remodel your home or want to work on your basement? Are you thinking of ways for arranging money for remodeling your kitchen? You have a number of home improvement options that can help you with your finance improvements.

The financing schemes for home improvement are generally preferred as it is one of the ways of increasing the property value. Whether you want to work on the master bedroom or living room or fix those leakages in the pipes of your bathroom the home improvement finance will do the needful for you.

What do you mean by a second mortgage?

Compared to a first mortgage which already exists, a second mortgage is considered junior. Replacing an existing mortgage with a higher one it will be more cost effective for a borrower if he considers a second mortgage. Take for an example, your house is worth about $200,000 and you have already taken $120,000 as your first mortgage amount. You will be only considered eligible by the bank to take a first mortgage if the credit scores that you have are good enough for financing 80% of the total of $200,000 or $160,000.

You can only borrow $40,000 for your second mortgage when you have subtracted the sum of $120,000 taken for your first mortgage. The amount taken for the second mortgage is taken in public records and it almost becomes a kind of lien against the house.

In case you opt for a second mortgage you have to make a monthly payment additionally. So before you choose a second mortgage option it’s better to analyze the monthly expenses as well as obligations so that you can be sure of handling a new payment. Along with this, the risk involved should also be kept in mind. You have risked your home, so if you think you would be able to repay the mortgage amount then only go for the loan.

Benefits of a second mortgage:

A second mortgage comes along with a few innate benefits. Since it is based on the home equity, it is quite beneficial for a home owner as the funds are readily available. It is also considered a more secured loan and one can obtain it more easily compared to other loans. The interest that you pay on any second mortgage is even tax deductible. It happens to be one of the biggest benefits that do not usually come with other loans. You can easily deduct interest payable on your second mortgage from the taxes.

So when it comes to home improvements a second mortgage is always the best option to finance it. Since the interest rate is  a bit low you can be very confident of repaying your loan. Moreover renovating your house may not call for a huge sum of money compared to what it goes in purchasing a new one. But it is not that less that you can pay it with the amount that you have in your savings account.

The option left to you is that of a second mortgage which is more secured and thus preferred. There are even many buy to let mortgages options that allows the investor to borrow a sum of money for purchasing private rented sector’s property that they further give it on rent to tenants. Since late 1990s this has been a very popular practice in UK.

Financing your home improvements have become easier with the second mortgage option. You can be rest assured of getting a secured loan and thus concentrate on giving your home a new look.

Author Bio:

Jonny Pean is a finance expert by profession. He finds immense pleasure in writing financial blogs with a special mention to buy to let mortgage option and  Mortgage calculator from emortgagecalculator.co.uk.

Home Ownership

7 Ways To Improve The Resale Value of a Home

It is every homeowner’s dream to increase the resale value of his home. This is very natural and holds even if you are not planning to sell your home. Even today, a home is usually a family’s biggest asset and it always helps to have it priced as high as possible on the real-estate market. If the worst financial situation demands, you should be able to sell your house for the best price, and for this it is important to improve the resale value of your home.

People are sometimes surprised how little things can drastically improve the resale value of a home. Thus you need to do lots of small things and these can add up really big. Exactly what needs to be done depends a lot on the neighborhood, but there are some general tips that you can follow –

  • Exteriors: This is the first thing that people notice when they look at your house. Make sure that the paint is good and appears elegant. Painting is a small investment but can pay off very big. Ensure that you are following the latest trends in home exteriors.
  • Windows: These can really define the look of your house and thus should be chosen carefully. Newer replacement windows come with tinting and energy efficiency built into them, so they also save you money in the long run.
  • Landscaping: Landscaping is very good for improving the home value as it appears inviting and elegant at the same time. Potential buyers will surely be lured by this additional feature. If you have the place, landscaping can be a relatively small investment of money and time to greatly add value to the home. Again, it is important to follow some latest landscaping trends to know what is in and what is out.
  • Lawns and Gardens: Lawns and gardens need to be maintained well. If not, they can break the entire look of the home as a whole. It is best to maintain the garden periodically. If you are interested in gardening, you can consider addition some value product to the garden, like practicing organic gardening and growing fruits and vegetables. This not only helps your stay at your home but greatly improves the resale value as well.
  • Renewable Energy: If you can, try adding a source of renewable energy to your home, like solar panels. This will take care of all your energy needs, and you might even be lucky to make money by selling electricity to the grid. In addition, it greatly helps improve the value of a home. Speak with a professional team like Alek HVAC to see what changes you can make to your home.”
  • Lighting: Good lighting is very important because it reflects the true beauty of the home from the inside. It helps to use diffuse and sharp lights with care at different places to ensure the right feel at different places of the home. Also, consider using energy efficient lighting like LEDs and CFLs as they are the trend of late, since they are environmentally friendly and help save on electricity bills as well.
  • Renewable Energy: If you can, try adding a source of renewable energy to your home, like solar panels. This will take care of all your energy needs, and you might even be lucky to make money by selling electricity to the grid. In addition, it greatly helps improve the value of a home.
  • Car Port: A car port is a cheap and efficient way to improve home resale value and should be considered by all homeowners.

After significant renovations and increases in home value, more home insurance quotes are needed to match the increase in value.

These are some of the ideas you can use to enhance the value of your home. You should feel free to make all the small changes that will make your home stand out from the rest of the neighborhood.

Home Ownership

10 Steps to Take Before You Buy Your Home

Purchasing a home is a complicated and time-consuming process, and staying on track is important. Proper planning will make the process go more smoothly and ensure that you end up with the best house possible. Putting in some work before you make an offer can also save you some serious cash. Here are 10 of the most important steps to take before you purchase a new home.

1. Sell Your Current Home First

If you already own a house, consider selling it or renting it out before looking for a new one. Doing so will save you the trouble of making two complex transactions at once. Selling before you buy will also make it easier to determine an appropriate amount for your down payment. 

2. Find an Agent

Even experienced home buyers can benefit from the services of a professional real estate agent. Agents have access to information on neighborhoods and other industry buzz that can help you find the best home possible. They can also navigate the tricky negotiations process to get you a low price with plenty of perks.  A great agent has attended a reputable real estate school and understands the in’s and outs of most deals.

3. Decide What You Want in a Home

People purchase homes for a wide variety of reasons. Figuring out your family’s specific priorities will help you to narrow down your search by eliminating homes that fail to meet all of your requirements. 

4. Check Your Credit History

Obtain a copy of your credit history as soon as possible, especially if you plan on getting a mortgage. If there are any dings or errors in your credit report, try to clean it up as much as you can before you start the mortgage process. 

5. Find a Lender

When seeking a mortgage, compare the rates of different lenders and keep an eye out for programs that cater to your specific situation. Focus on finding a mortgage program with low interest rates and lender fees. 

6. Pre-Qualify for a Mortgage

To make an offer on a home, you will first need a pre-qualification letter from a lender proving that you can afford the mortgage. The pre-qualification process involves a cursory review of your financial situation. Pre-approval is much more extensive and provides a better estimate of your financial capabilities. Pre-approved buyers are generally preferred over pre-qualified buyers.

7. Save Money for a Down Payment

Although the Federal Housing Administration allows payments as low as 3.5 percent, try to make a down payment of at least 20 percent of a home’s contract sale price. A higher down payment will lead to lower mortgage payments and may also reduce your interest rates.

8. Start Researching Neighborhoods

Before you consider buying a house, make sure you know as much as possible about the surrounding area. Search online for information like crime statistics and transportation options. Even if you do not have children, look for an area with good school districts as this will boost the value of your property. 

9. Have the Home Inspected and Appraised

Hiring a professional home inspector is the best way to avoid costly repairs in the future. You will also need to determine the market value of the house and provide your lender with the information. Keep a copy of the appraisal for your records. 

10. Purchase Homeowner’s Insurance

Most lenders will only finance your real estate transaction once the property is fully insured. Homeowner’s insurance is often expensive, especially in areas that are prone to natural disasters like floods and earthquakes. Make sure you shop around to find a good deal, and see if your car insurance company will let you add a home insurance plan at a discounted rate.