Should You Buy A Home Warranty?

Should You Buy A Home Warranty?When you buy a new house, the first thing you want to do is protect your investment. You already have property insurance. Should you also buy a home warranty?

What Is A Home Warranty?

A home warranty is not the same thing as insurance. Home warranties are service contracts. If a covered item breaks down and it is covered in the terms of the warranty, the home warranty company will pay to fix or replace that item.

What is Covered Under A Home Warranty?

Every home warranty contract is different but generally, a home warranty may cover items like major kitchen appliances, HVAC components, sump pump, in-home sauna or spa tub, and/or ceiling and exhaust fans.

Often, a homeowner can get an extended warranty contract that covers items like the washer and dryer, garage door opener, septic system and swimming pool components.

Understand The Costs

A basic home warranty costs between $350 and $500 annually, depending on what coverage you get. However, if something does break, you will also be on the hook for incidentals like service call fees or a deductible.

Know The Benefits

There are considerable benefits to having a home warranty contract in place, especially when something expensive breaks down, like a furnace. There is a lot of peace of mind knowing that you will be able to quickly get something fixed in your home.

You Might Already Be Covered

Your homeowner’s insurance policy might cover some of the same things that are covered with a home warranty. So you could be paying for duplicate coverage on some items. However, your homeowner’s insurance likely will not cover a dishwasher that needs to be replaced or a fridge that suddenly goes out.

There Are Alternatives

Finally, before you pay for a home warranty, remember that there are alternatives. For example, most HVAC companies offer financing options to buy a new furnace. Most appliance stores also offer financing on major purchases like refrigerators and dishwashers. You could save your $500 or so a year and put it in a savings account for a rainy day instead of gambling that you might have a major repair or purchase that year.

There are pros and cons to home warranty plans. Just be sure you fully understand both sides of the issue before you sign on the dotted line.

 

How To Tell If A Home Has Been Well-Maintained

How To Tell If A Home Has Been Well-MaintainedAs a homebuyer, your real estate agent will do their best bring you to see homes that meet the criteria you asked for. However, there’s no guarantee that a home will have a history of being properly cared for.

Your real estate agent can choose the homes you see, but they have no control over the property owner’s homeownership habits.

Why Home Maintenance Matters

Home maintenance should matter to you as a homebuyer and later on as a homeowner. A home needs consistent and proper maintenance in order to run efficiently, and that doesn’t only apply to moving parts like the HVAC system. If a home isn’t looked after, it begins to run down and then break down.

Just as a poorly maintained vehicle will eventually strand its owner on the side of the road, a poorly maintained home will eventually fail to properly house its occupants.

How To Tell If A Home Has Been Well-Maintained

A home that hasn’t been cared for will easily give up its secrets to a discerning homebuyer. Conversely, you can tell if a home has been cherished and well-maintained over the years.

  • Home maintenance warranties in place would be a selling feature and indicates the owner understands the power of proactive maintenance.
  • Solid, quality flooring indicates that the owner has shored up the subfloor beneath tile, removed carpet spills expeditiously and replaced cracked, peeling or missing planks or tiles.
  • No signs of basement water damage may signify that owner has installed sufficient sump pump or other drainage solutions, applied basement waterproofing or taken other steps to ensure a dry basement.
  • Finished basement shows that owner has taken care to improve the home where possible and that the owner trusts their basement possessions will be safe from water damage.
  • Straight roof lines mean that there is likely no sagging roof problem that hasn’t already been addressed.
  • Mature, healthy plantings are a sign that the owner has given thought and care to the surrounding landscape over a long period of time.
  • Sound gutters in good condition show that the owner has taken steps to ensure proper roof drainage to water damage.

These are all positive signs for a prospective homebuyer. Of course, you must still pay attention to the home inspection report. But odds are if you see all these signs, you’re probably looking at a new home that will serve your needs for many years to come.

 

The Most And Least Expensive Cities In America

The Most And Least Expensive Cities In AmericaThe cost of living in America varies widely in different parts of the country. In general, it is less expensive to live in the country than in the cities.

However, there are many cities where the cost of living is modest compared to others where the money needed to live there is outrageous in comparison.

These rankings came from comparing the monthly cost of renting a one-bedroom apartment, utilities, the price for gasoline, and the cost of groceries.

The Ten Lowest-Cost Cities For Renters

From Texas and Ohio to New Mexico and Arizona, there are some nice cities in this low-cost group.

The top ten lowest-cost cities are:

  1. El Paso, Texas
  2. Lincoln, Nebraska
  3. Toledo, Ohio
  4. Wichita, Kansas
  5. Louisville, Kentucky
  6. Tulsa, Oklahoma
  7. Memphis, Tennessee
  8. Lexington, Kentucky
  9. Albuquerque, New Mexico
  10. Mesa, Arizona

For the top ten lowest-cost cities, the total monthly expenses for two adults ranges from just under $1,200 per month in El Paso to just over $1,500 per month in Mesa. These cities are a great deal when compared to other cities.

In America, the median rent of $1,566 per month is more than the total amount needed to live in these low-cost cities.

The Ten Highest-Cost Cities For Renters

It is not surprising that the biggest metropolitan areas are on the high-cost list.

The top ten highest-cost cities are:

  1. San Francisco, California
  2. New York, New York
  3. San Jose, California
  4. Oakland, California
  5. Boston, Massachusetts
  6. Jersey City, New Jersey
  7. Washington, D. C.
  8. Los Angeles, California
  9. Seattle, Washington
  10. Irvine, California

For the top ten highest-cost cities the total monthly expense for two adults ranges from just over $2,000 per month in Irvine to over $4,200 per month in San Francisco. For those wanting to live in the “City by the Bay” of San Francisco, both of the people in a couple better have an incredibly well-paying executive position to be able to afford to live there.

What About Home Buying?

The national median home price in America is $229,000. The city with the highest median home price is San Francisco at $1,352,000. New York is only $672,000 in comparison. The median home price in El Paso is $129,800; however, El Paso does not have the lowest-priced homes in the country.

The Top Ten Cities With The Lowest-Priced Homes

There are many cities where the homes sell at bargain prices for under $100,000, these include:

  1. Detroit, Michigan — Median home value: $42,800
  2. Dayton, Ohio — Median home value: $66,500
  3. Cleveland, Ohio — Median home value: $67,600
  4. Lansing, Michigan — Median home value: $77,100
  5. Buffalo, New York — Median home value: $77,800
  6. Toledo, Ohio — Median home value: $78,600
  7. Rochester, New York — Median home value: $79,400
  8. Akron, Ohio — Median home value: $80,100
  9. South Bend, Indiana — Median home value: $81,100
  10. Brownsville, Texas — Median home value: $85,900

Conclusion

There are bargains to be found in many parts of America for those that do not have to live in the big cities.

Many younger people are now part of the “gig” economy. They do all of their work online and can work from anywhere that has a decent Internet connection. For these young people, finding a lost-cost city in America to live in and finding a modestly-priced home to buy is not limited to any particular area.

7 Reasons To Buy A Home In The Summer Months

7 Reasons To Buy A Home In The Summer MonthsIf you’ve been putting off your house hunting, it’s time to head out. Summer is the best season to go shopping for a new home, for a variety of reasons. 

1. More Inventory

Homeowners list their homes for sale in the summer more often than any other season. When you shop for a new home during this time, you’ll have a much wider selection of homes to choose from. 

2. Better Prices

More inventory in summer often turns the local real estate scene into a buyer’s market. Home sellers may have to compete with other sellers on the same block or even down the street. This gives buyers a nice position of leverage to possible get a better price on a new home. 

3. More Neighborhood Activity

There’s no better time to get a true sense of the neighborhood than summer. In summer, kids are out playing, homeowners are out tending lawns and friends are gathering for backyard BBQs. These are all activities that can give you an accurate portrayal of the neighborhood culture. Take advantage of summer weekends, too; you’ll find even more neighborhood activity then. 

4. More Visibility

By summer, all the snow, ice and autumn debris has either melted or been cleaned up by homeowners. You’ll have more visibility to view the condition of the roof, siding, deck, lawn, driveway and walkways. Under the cover of snow and ice, you might miss important issues.

5. Evidence Of Any Flooding Problems

Spring rains produce evidence of any flooding issues with water lines along foundation walls. Summer is the best time to go home shopping because this kind of evidence will be fresh and easily identifiable. Flooding isn’t always a reason not to buy a home, but it helps to know what potential issues you could be facing.  

6. More Free Time

Most people have more free time in summer than any other time of year. 

It is more relaxing to go home shopping when you know you aren’t taking valuable time away from work. On your summer vacation, you also don’t have to take unpaid days off to view homes with your real estate agent. 

7. Easier School Transition

When you do go ahead and buy in summer, your kids will have an easier time of transitioning to a new school. Instead of breaking up the school year, your kids can end one grade in one school and start the new year at the new school.

Buying a home in summer just makes good sense. Contact your local real estate agent today so you can hurry and take advantage of the summer real estate market in your area. 

Why Every Home Buyer Needs A Pre-Approval Before Home Shopping

Why Every Home Buyer Needs A Pre-Approval Before Home ShoppingThere are many people who are considering buying a home because the current market is so attractive. With the ability to carry out virtual tours, this makes it even easier for people to find the home of their dreams.

While the fun part is looking at houses, it is important to get pre-approved for a home loan first. There are a few reasons why everyone must get pre-approved before they start the process of shopping for a home. 

This Provides A Chance For People To Get Their Finances In Order

Buying a home is a major decision. For many people, this is going to be their biggest investment. For this reason, it is critical for everyone to have their finances in order.

Of course, some people might think that their finances are fine when, in reality, this might not be the case.

For example, someone might be self-employed and think they are doing well; however, many lenders will not accept self-employment income as “reliable” unless they see at least two years of tax records. Furthermore, because those who are self-employed often take large tax deductions (due to business expenses being deductible), their gross taxable income is also lower.

This can be a problem for lenders who want to make sure their borrowers have a high gross taxable income to pay back the loan.

Increases The Attractiveness Of An Offer

If someone finds a house they love, there is a strong chance that someone else has fallen in love with the home as well. The seller wants to make sure that whoever is providing an offer on a home is a serious candidate. With a pre-approval letter, this makes the offer far more attractive.

This is because the seller knows that nothing is going to hold up the sale. If someone isn’t pre-approved, there is a chance that they might make an offer on the home only to have it stonewalled by the lender. This can be frustrating for someone who is trying to sell a home.

Avoid These Problems By Getting Pre-Approved

In order to avoid these problems, everyone must get pre-approved before they start the process of searching for a home. By getting pre-approved, people can expedite the home buying process.

The Basics Of A Mortgage

The Basics Of A MortgageThe vast majority of people who are interested in buying a home are not going to be able to pay cash for the home. Even for those who can buy a home in cash, they often would rather take out a loan to avoid pulling money out of their investments where they would have to pay capital gains taxes.

Those who take out a loan to buy a home will apply for something called a mortgage.

Simply put, a mortgage is a loan that someone uses to buy a home. Mortgages are very specific to the real estate industry; however, they are similar to other loans. People borrow money to cover the difference between the down payment and the cost of the house.

Then, they pay back the loan over a specified period of time with interest. For those who are buying a home, it is important to understand the basics of a mortgage.

Qualifying For A Mortgage

First, anyone buying a home has to qualify for a mortgage. Most lenders will have a set of criteria they use to approve someone for a loan. Some of the factors include:

  • Many borrowers will have to meet a minimum credit score which lenders see as a reflection of someone’s ability to pay back a loan on time
  • Lenders will also need to see that someone has a proof of income (or proof of assets) so that they know the individual can afford to pay back the loan
  • Finally, lenders will also want to see what other debts someone is carrying such as a car loan, student loans, or credit card debts

The lender is taking on risk by providing a mortgage to someone. They want to make sure the borrower is going to reliably pay the loan back.

The Terms Of The Mortgage

Once someone has been approved for a loan, they need to figure out what the terms of the mortgage will be. Some of the variables include:

  • The length of the loan
  • The size of the monthly payments
  • The total amount of the loan
  • The down payment required for the loan
  • The interest rate on the mortgage
  • The presence (or absence) of private mortgage insurance, or PMI

It is critical for everyone to talk with an experienced professional to make sure they understand the terms of the mortgage.

How Does A Home Appraisal Work?

How Does A Home Appraisal WorkWhether you’re a buyer or a seller, a home appraisal is a critical component of the home selling process. An appraisal is also required in situations where a home is gifted to a family member, so it’s important to have a clear understanding of what it entails. 

What Is A Home Appraisal?

A home appraisal is an unbiased estimate of a home’s fair market value conducted by a professional appraiser. All 50 states require that appraisers be licensed and/or certified and demonstrate knowledge of the specified area. The purpose of a home appraisal is to determine whether the home’s asking price is appropriate based on its location, condition, size, and amenities.

Appraisals are done in almost all purchase, sale and refinance transactions, with the exception being when a buyer uses cash and doesn’t have a mortgage. They are typically coordinated by the mortgage lender to ensure the loan isn’t too large in relation to the home’s value.

How Are Appraisal Values Determined?

Licensed appraisers calculate a home’s value based on comparable recent sales in the area and current market trends. Factors such as the home’s floor plan, size, number of rooms, and any upgrades or amenities are also considered. Upgrades and amenities could include things such as a pool, an expanded garage, or a remodeled kitchen.

The appraiser conducts a visual inspection to appraise a home, noting the home’s condition and whether any major repairs are needed. It’s important to note that this differs from a home inspection in that the appraisal assesses a home’s value, while an inspection assesses its condition. In an inspection, the home inspector actually makes repair recommendations. During an appraisal,the appraiser notes any necessary repairs but does not make recommendations.

When Is An Appraisal Done?

After an offer is made, an appraisal is one of the first steps in the closing process. Everything will proceed as planned as long as the appraisal value comes in at or above the price in the contract. If it appraises for below that amount, closing can be delayed or canceled altogether.

What Does A Home Appraisal Cost?

Costs vary based on the mortgage type, but a home appraisal generally costs $300-500. It is almost always paid for by the borrower as part of closing costs.

Some Millennials Are Finding Home Buying Overwhelming

Some Millennials Are Finding Home Buying OverwhelmingMany millennials are reaching the age where they are thinking about buying homes for the first time. It turns out that many members of this generation are finding this process challenging. Even though the housing market is great for those looking to buy, surveys indicate that this generation also finds the process overwhelming.

Reports have been published showing that many millennials are planning to buy their first home in the next year, showing that owning property is still a strong part of the American dream. Furthermore, many millennials also know that this is a great time to buy. Why are millennials finding this process so challenging?

Student Loan Debt

One of the biggest reasons why millennials are having issues purchasing a home is student loan debt. When someone is looking for a home, any potential lender is going to take their existing debt into account. It is no secret that student loans are a major issue right now.

With numerous millennials saddled with student loan debt, this makes it hard to qualify for a mortgage. While other forms of debt are easier to pay back, student loan debt is not. Some millennials have student loan debt that looks like a mortgage. 

A Poor Understanding Of Costs

Even though millennials may look at their rent payments as a solid barometer for their mortgage payment, there are other costs that millennials need to consider. These include real estate taxes, HOA fees, homeowners’ insurance, and potential repairs. Therefore, they might need to reset their expectations.

Comparison Is A Dangerous Temptation

Finally, too many millennials are tempted by what they know. Many millennials end up moving back into their parents’ house after they finish school. The job market can be tough and they think this is a great way to save money. On the other hand, this also means they might end up looking for a house that is similar to their parents’. 

Many millennials have set the bar high for their first home. A property like their parents’ simply isn’t within the budget. An unwillingness to accept this makes it harder to find a home. On the other hand, there are affordable homes out there. Millennials simply need assistance to find them.

First-Time Buyers’ Guide: How To Get A Mortgage And Buy A House

When you are in the process of buying a home, there are a lot of moving parts that need to work together. It can be hard for you to keep track of everything that has to happen, particularly if you are going through this process for the first time. With this in mind, there are a few basics that you should remember when you are looking for a home loan.

Work With A Professional 

It is critical for you to work with a real estate agent who can act as a guide during this process. A real estate agent has taken plenty of individuals and families through the process of finding a home loan and purchasing a house. Therefore, he or she will be able to work with you from start to finish as the home loan process unfolds. 

Find A Loan Officer

Once you have found a real estate agent, the next step is to find a loan officer. Your real estate agent might have connections throughout the industry and can recommend a loan officer. Many real estate agents will recommend that you use a mortgage broker. A mortgage broker often works with multiple loan companies. This means that you may have multiple home loan options at your disposal. Ideally, you will be able to leverage these options against each other and find the best deal for you.

Understand The Basics Of A Home Loan

When you are evaluating your home loan options, there are a few factors that you need to consider. The most important part of a home loan is the interest rate. You want to make sure that you get the lowest interest rate possible as this is going to impact the amount of money you pay over the life of the loan. Then, you want to make sure that you can afford the down payment required. If you can’t put enough money down, you might have to purchase mortgage insurance. You want to avoid this cost if possible. 

Work With An Experienced Real Estate Agent.

During this process, it is important for you to follow the advice of your real estate agent. Once you have found the right home loan, you will be able to complete your home purchase.

How To Save Big Money On Your Next Home Renovation Project

Every year, homeowners spend billions of dollars renovating their homes. It almost seems expected that homeowners are going to end up going over budget on any project. On the other hand, this doesn’t have to be the case. In reality, there are a few tips and tricks that homeowners can follow to help them save big money on that next home renovation project.

Serve As The General Contractor

Many homeowners hire a general contractor to control the staffing of each individual project. While this might reduce stress levels, it also costs more money. Hiring a general contractor adds an additional middle man to the project who might charge a premium for each individual project.

Homeowners that need to renovate the kitchen, replace the roof, and find a new water heater should hire professionals to handle these individual projects; however, they don’t necessarily need to hire a general contractor. Skipping this step can save money.

Seek Out Multiple Bids On Each Project

Some homeowners don’t like making phone calls and filling out paperwork to collect bids for various projects; however, collecting multiple bids can help homeowners save money. On any given home renovation project, try to collect at least three bids. For larger projects, it is better to collect even more. 

Then, once all the bids are collected, they can be leveraged against each other for a lower price. Homeowners are often surprised by the wide range of bids on a project. Some proposals might even be thousands of dollars apart.

Take Advantage Of Sales

Just as food goes on sale at the grocery store, the materials needed to complete a home renovation project might go on sale from time to time as well. Taking advantage of sales at department stores can be a great way to reduce overhead costs. There might even be cheaper options online. 

Reduce Home Renovation Costs

These are a few of the most important tips for reducing the cost of that next big home renovation project. Home renovation projects don’t have to break the bank! Be sure to collect multiple bids and leverage inventory sales.